The fear has been very great in recent weeks on the cryptocurrency market, partly due to rising tensions in Eastern Ukraine. As a result, bitcoin (BTC) quite a bit last week. On Wednesday, the price was still recovering from this recent downtrend, but around $39,000, the resistance proved too great and bitcoin started to fall again.
Then Russian President Vladimir Putin delivered his infamous speech and began the invasion of Ukraine. Most (risky) stock markets were hit hard and bitcoin then fell all the way to $34,500, the lowest price in a month since it fell to $33,000.
Bitcoin price suddenly recovers strongly
Cautiously began the bitcoin price to recover. Stock markets started to turn green, while gold fell. Bitcoin first encountered some resistance around USD 35,500, but was able to move past this fairly quickly. There was also some resistance around $36,000, but the price broke through this a few hours later. Then bitcoin suddenly took a big leap.
Bitcoin shot up from $35,900 to $38,900, a staggering 8.4% gain in just an hour and a half. Bitcoin then briefly dipped below USD 38,000, but recovered immediately. Overnight the price held above $38,350, but failed to break through $39,000 this morning. Bitcoin is slowly falling again and is at $38,350 at the time of writing Binance and €34,300 on Battle.
The market takes 47-days on avg to recover after an armed conflict.
The strong correlation between the $SPY and #Bitcoin shows that they’ll recover together if things escalate. pic.twitter.com/AeX8yvsTvj
— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Ninetropic_) February 24, 2022
Short squeeze, peak in volume and a double bottom
The recent decline was again accompanied by a so-called long squeeze, or a significant liquidation of long positions. This increase coincided with a significant short squeeze. That ensures that the market finally looks healthier again, and less overleveraged.
45 million dollars of short liquidations in 10 minutes. Last time a comparable amount of short liquidations happened was 4 months ago. #Bitcoin shorts just got heavily squeezed 👀 pic.twitter.com/LutwjkIDEr
– Mikołaj Zakrzowski (@PrfDude) February 24, 2022
The price increase is also accompanied by a significant increase in trading volume. It has been relatively very low for months, but saw a strong rise after the price bottomed out. It indicates that investors may still buy the dip in these uncertain times. The Ukrainian crypto exchange Kuna, in particular, saw a huge spike in trading volume. Perhaps not that surprising, since the Ukrainian hryvnia, like the Russian ruble, has lost a lot of value.
For now, the markets seem to be shaking off the effects of the war. This may be because much of the fear has already been priced in in recent weeks. It may also be related to a decrease in concerns about the Federal Reserve’s impending rate hike. This has also caused a lot of uncertainty in the financial markets for some time now. It is possible that this war has led the Fed to adopt a more restrained approach.
Despite this, the situation in Ukraine only continues to escalate. The fear and uncertainty therefore remain very high and more volatility will therefore not be a surprise. Analysts are currently talking about the possible formation of a so-called double bottom. That’s usually a bullish sign for the bitcoin rate.
$ BTC could put in a potential weekly double bottom and if it did, will have been off some good levels. 88.6 off the June low and 88.6 off the Jan low. Price painting a dragonfly doji above the POC and weekly vwap. OBV and RSI have some potential W’s. https://t.co/UEbVW5zynB
— Decentrader (@decentrader) February 25, 2022
HTF: Daily
Looking at possible double bottom in the making with some hidden bullish divergence.
Lets revisit when we get above 41-42k. #bitcoin #hodl pic.twitter.com/M4sJXR0Buj
— Matt Cheng (@MattchengBtm) February 25, 2022
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