As hostilities continue in Ukraine we have already been able to appreciate the effect on the stock markets and on bitcoin. On the 24th of this month, the Russian incursions into Ukrainian territory and the assets quickly showed the effect of a very abrupt fall that lasted several hours. We can see a similar pattern in several of the main stock market indices, such as S&P500, DAX or Dow Jones, among others, in which the sharp drop on the 24th to recover ground in the following days with large volume spikes in activity.
Weekly chart of the SPDR S&P 500 ETF Trust Index. Source: Google.
Bitcoin let the fall be noticed as well as the stock markets
similarly bitcoin and various alts fell sharply in the early hours of the 24th but the entry of purchases introduced enough volume to stop and even recover the previous price levels. For a couple of days bitcoin has been establishing the high range of its current trading zone between 38 thousand and 40 thousand dollars showing upside rejection near $40,000. Although the last daily candles mark the beginning of a possible setback, it is still early to know the course of the price. In this way, next week will be crucial to establish a trend.
Bitcoin chart against the dollar (USD) in 1D candles. The arrow marks the day of commencement of hostilities. Source: Tradingview
Bitcoin: dump or pump?
Despite the fact that bitcoin has shown downward rejection from the area of 37 thousand dollars it is also not standing out for its upward trend. In this context, the trading team at Bitfinex has stated that they continue to see a lot of development and innovation despite the dark scenario that hangs over Eastern Europe at the moment. Actually, the price is trapped between two important zones ranging between 35 thousand and 40 thousand dollars and until it breaks one of the two POCs (major volume accumulation areas) we will not have a clear indicator of the trend. Another point to note is that 3 months in negative for the main cryptocurrency and historically there has never been 4 consecutive months in red. However, the geopolitical situation due to the Russian invasion in Ukraine could slow down the recovery of the price or alter this historical trend.
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