Did cryptocurrencies fall after Russia’s military operation in Ukraine?

The Country Manager of Bitpanda Spain, Alexander Zalashared again with Cointelegraph en Español his latest weekly analysis of the cryptocurrency market for February, and this time he told us that Tensions have risen sharply in Eastern Europe since Thursday, when Russia launched a military operation in Ukraine.

Zala told us that both the cryptocurrency and traditional markets collapsed that day: Bitcoin falling to 30,000 euros, “its lowest value since January” described Zala, who further said that the total cryptocurrency market capitalization briefly fell below €1.4 million, before managing to climb back above €1.5 million. “All major altcoins followed suit, suffering double-digit losses”he added.

“Not only did the cryptocurrency market experience substantial declines, as the political situation also had an immediate adverse effect on most other financial markets: the stock market also crashed and liquidations skyrocketed,” Zala noted in your analysis.

Likewise, Zala stated that earlier this month, Bitcoin experienced a very positive price movement, touching 40,000 euros on February 10. However, for him, this movement came to an end when new developments took place in the Ukraine. “On Thursday, Bitcoin was still trading above its January low, which represents a major support zone. The new results of the situation are considered to be the driving force of the market and any negative developments in the near future will probably cause prices to fall further.”said.

“However, today Friday, BTC recovered some of the losses along with many major altcoins. The largest cryptocurrencies posted gains of almost 9%, with some altcoins outperforming BTC with double-digit gains,” he noted.

Altcoins lost but regained ground

Zala commented that again the altcoins followed the direction of Bitcoin in this situation of geopolitical escalation, where according to him, impending political events are the engine of the market.

On ethereum, commented that the second largest market cap coin fell below its trendline resistance and plunged along with the broader market. “On Thursday, the price touched 2,100 euros, the support level of January, but rebounded to 2,300 euros on Friday morning,” he added.

As to XRP, after a strong rally in the first week of February, Zala mentioned to us that it has entered a consolidation phase, forming a large channel. “The price failed to hold above its support and has fallen below the 0.6 euro level, only to rise back above the same level today. Indicators turned bearish, just like other major altcoins,” he clarified.

Regarding the price of ADA, Zala highlighted that it maintained a downward trend for most of the last seven days. “On Thursday Cardano continued to decline and on Friday it regained some strength. Indicators remain bearish and ADA is trading at its lowest price this year. The price is down about 75% from its all-time high and is now hovering around €0.7, at a level last seen in February 2021,” he said.

On the other hand, Zala also spoke on this occasion of AAVE, where the bulls are struggling to reverse the downward trend in price since it peaked in mid-May last year. “AAVE’s all-time high in May 2021 saw the cryptocurrency almost reach €600, but it is currently back around €110,” Zala commented.

“The Aave protocol, one of the largest lending protocols in the crypto space, has €10 billion total value locked (TVL) and a market capitalization of €1.5 billion,” he added.

Cryptocurrency Fear and Greed Index is marking fear

Finally, Zala commented that in the wake of Russia’s military operation against Ukraine, the cryptocurrency market fell significantly, in parallel with financial markets in general. Furthermore, Zala tells us, funds have been poured into what is historically considered a “safe haven”:

“Gold reached 1,800 euros per ounce on Thursday. Market sentiment worsened and the Crypto Fear & Greed Index is now pointing to fear. The value of the index fell from 52/100 to 27/100 in the span of a week, hitting 23/100 on Thursday, marking extreme fear,” he said.

“The war between Russia and Ukraine is causing an increase in uncertainty and fear in world markets. Risk assets, equities, as well as cryptocurrencies do not seem to tolerate the situation well. In the past, the Cryptocurrency Fear and Greed Index indicating extreme fear at 25/100 meant that it was a better opportunity to buy – rather than sell. However, with the external factors involved, this time could be different”said Zala to conclude.

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