Due to Russia’s invasion of Ukraine, the flagship cryptocurrency asset, Bitcoin, briefly traded over the $40,000 trading zone late Friday 25th February night, after plunging below the $35,000 trading zone. In what many are calling a relief rally, Bitcoin climbed nearly $5,000, or 16.80%, from yesterday’s low of $34,459 to trade as high as $40,250.
The impact of Russia’s special military operation in Ukraine, which signaled the start of a full-scale invasion of its neighbor, was felt by markets around the world. The bitcoin market was not spared, with its market capitalization dropping below $1.5 trillion. However, it has since recovered, and it now trades at $1.72 trillion.
Altcoins have also recovered from yesterday’s losses. Ether, for example, which temporarily dipped below the $2,300 mark, immediately recovered alongside Bitcoin and is now trading at $2,603 per coin.
Crypto Market Outlook
The top 20 cryptocurrencies have seen increases of 10% or more, with Terra’s LUNA token leading the charge with a gain of more than 20%. The coin also made it into the top ten by market capitalization, where it presently sits at #9 with a value of $25.3 billion.
The cryptocurrency market has totally recovered from losses observed earlier in the day yesterday, thanks to a last-minute rebound seen at the start of Asian trading. Bitcoin hitting a critical support zone, where many purchase orders were filled, is largely responsible for the rally.
According to Coinglass data, 94,769 traders were liquidated over the weekend, totaling $439.61 million in liquidations. Longs accounted for $155.45 million, or 35.36 percent of the total, with shorts accounting for the balance. This also revealed that the majority of liquidation occurred at the close of the New York/beginning of the Asian session, as it was when Bitcoin’s price increased significantly.
Despite this upbeat forecast, Pentoshi, Merit Circle DAO’s head of partnership, voiced concern about the “whole macroclimate,” which “looks very awful.” In a follow-up tweet, he reiterated his prediction that BTC will continue to rise from here. “BTC is presently in the blue value zone,” Pentoshi said. This isn’t the route I had intended to take to get here. I believe this will be a wonderful buy area in the future.”
“Bitcoin and other cryptos have been moving up and down in unison with the Russia/Ukraine news,” according to David Lifchitz, Managing Director and Chief Investment Officer at ExoAlpha, so the drop in cryptos and other assets was predicted following “the first, even if surgical, strikes in Ukraine.”
He went on to say that Bitcoin’s recent low “was near the low of the range it has been trapped in for weeks now,” and that “what happens in the next couple of days with the Ukraine-Russia scenario will dictate the direction of Bitcoin and other cryptos.”
With the Russian-Ukraine conflict in full swing, traders should exercise caution when trading markets, as volatility is at an all-time high. Bitcoin is currently trading at $38,612, which is below the $40,000 mark.