Market Wrap: Bitcoin Rises Despite Geopolitical Tensions

Bitcoin (BTC) and different cryptocurrencies traded higher connected Monday, though immoderate analysts stay cautious astir geopolitical risks.

Talks betwixt Ukrainian and Russian negotiators could proceed implicit the adjacent fewer days, though immoderate officials said truthful acold nary woody connected a cease-fire has been reached, according to the Wall Street Journal

Meanwhile, the U.S. and respective European nations person imposed much sanctions connected Russia. For example, connected Monday, the U.S. Treasury Department prohibited transactions with the Central Bank of Russia and placed sanctions connected a cardinal Russian sovereign wealthiness fund.

In crypto markets, trading volumes betwixt the Russian ruble and bitcoin accrued to a nine-month high, according to data tracked by Kaiko. The emergence successful ruble-denominated bitcoin measurement prompted a backlash from 1 Ukrainian official.

"I'm asking each large crypto exchanges to artifact addresses of Russian users," Mykhailo Fedorov, vice premier curate of Ukraine and curate of the country's integer transformation, tweeted connected Sunday. "It's important to frost not lone the addresses linked to Russian and Belarusian politicians, but besides to sabotage mean users."

Bitcoin's trading measurement crossed large exchanges has declined aft the Feb. 24 spike, and selling unit is starting to fade.

Further, data from Glassnode shows a ample information of BTC held by investors astatine astir the $60,000 terms level has recovered caller buyers astatine the $35,000-$38,000 terms range. That could bespeak a short-term terms low.

So, has bitcoin bottomed? Not quite.

Bitcoin has been successful a downtrend since its all-time precocious successful November of astir $69,000, good earlier the Russia-Ukraine conflict. That means different factors specified arsenic planetary monetary tightening, regulatory uncertainty and lower crypto demand from China person weighed connected prices.

Still, cyclical downturns successful bitcoin yet signifier retired fixed the cryptocurrency's semipermanent uptrend.

On average, the S&P 500 takes astir 47 days to retrieve from geopolitical-driven sell-offs, according to information from Swissblock Technologies, a crypto analytics firm. Other studies amusement that equities continued to beforehand successful 3 to six months aft geopolitical-driven sell-offs. BTC could travel a akin betterment signifier fixed its rising correlation with the S&P 500.

The illustration beneath shows bitcoin's market-value-to-realized worth ratio (MVRV), standardized to amusement utmost upside and downside moves. Simply put, the ratio provides an estimation of bitcoin's deviation from "fair value."

The MVRV entered overvalued territory astatine astir BTC's November all-time terms high, but wasn't arsenic utmost comparative to the 2018 peak. That suggests the existent down rhythm won't beryllium arsenic severe arsenic the erstwhile carnivore market's 80% peak-to-trough decline.

Still, geopolitical events are highly uncertain, and the MVRV hasn't reached undervalued territory. That could constituent to further terms volatility implicit the abbreviated term.

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Digital assets successful the CoinDesk 20 ended the time higher.

There are nary losers successful CoinDesk 20 today.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to supply a reliable, comprehensive, and standardized classification strategy for integer assets. The CoinDesk 20 is simply a ranking of the largest integer assets by measurement connected trusted exchanges.