- Russian President Vladimir Putin has announced military action in Ukraine
- Bitcoin, along with most other crypto assets, has plunged as the market reacts to the news.
Tensions have been high throughout the month, with reports warning that Russia has been consolidating troops in areas bordering Ukraine. Russia has consistently maintained that it had no plans to invade Ukraine. However, the situation has changed drastically in the last few hours.
Russian President Vladimir Putin ad early Thursday that the country’s military is advancing into Ukraine for what it called a “special military operation” to conclude the “demilitarization” from Ukraine. With reports of explosions in the Ukrainian capital Kiev, concerns are growing that this could turn into a full-blown Russian invasion.
The price of Bitcoin suffers an 8% drop
Bitcoin has often been touted as a safe haven, but the world’s most important digital asset has crashed along with the stock markets in response to events in Ukraine.
According data provided by CoinMarketCap, Bitcoin has fallen by 8.52% in the last 24 hours. Currently trading at $34,448, the coin is around 20% below its mark last Thursday. In this ongoing bear market, strategists have estimated that Bitcoin could drop below $30k.
Bearish bitcoin market sentiment pushes investors to shift their portfolios into risky assets, including gold, whose value has reached maximum of one year. If the recent turn of events continues, Bitcoin could see an extended period of sideways movement. A Wall Street crash also spells red for Bitcoin markets.
“Key support for bitcoin right now is at $33,000 and $29,000. Right now we can still look for a higher low unless we get back below 33k. 29k would be key to hold if war fears really do shake the market. That’s the support of the 2021 lows.”, wrote on Twitter Lark Davis, a popular crypto strategist.
Bitcoin brings friends to the party
As Bitcoin sinks, so do altcoins.
Ether has fallen as much as 12% in the last 24 hours, and a number of other tokens have followed. BNB, XRP, SOL, ADA, AVAX and MATIC have plummeted by proportions greater than 10% during this period. The total cryptocurrency market capitalization has shrunk by more than $200 billion in the last 24 hours.
These price movements show that Bitcoin’s safe haven status has been nullified. Their interaction with traditional finance has caused a higher correlation with equities, and the joint move is, in this case, pushing altcoins further lower.