Bitcoin and Broader Crypto Market Corrects As Russia-Ukraine War Crisis Escalates
Earlier today, Bitcoin and the broader cryptocurrency market entered major correction eroding a total of $100 billion worth of crypto investors’ wealth. The world’s largest cryptocurrency Bitcoin slipped under its crucial support levels of $37,000.
However, it has managed to recover partially and as of press time, BTC is trading at a price of $37,493 with a market cap of $711 billion, as per data on WorldCoinIndex.
Apart from Bitcoin, the altcoin space has also registered a sharp correction. Ethereum (ETH) and all other top ten altcoins witnessed correction in the range of 5-15% each.
The recent price correction comes as the ongoing tensions between Russia and Ukraine escalate. Russian President Vladimir Putin has ordered his troops to march into the eastern Ukrainian states which are basically rebel states holding a pro-Russia stand.
The Russian President signed two decrees recognising the independence of these Moscow-backed regions. Although it is unclear whether this is the beginning of the invasion in Ukraine it has drawn shape criticism from the west.
The United Nation members held a late night meeting on Monday, February 21, condemning this move by Russia.
The correction in the crypto space follows the broader market sell-off in the Asian equity market during Tuesday’s trading session. This newly erupting geopolitical situation provided enough reason to the already fragile crypto market.
As the global equity and crypto markets correct, money has started flowing out of volatile assets and into risk-off assets like Gold. For e.g. the MCX Gold price registered a 9-month high moving past $1900 per ounce.
Bitcoin and the broader crypto market have been moving sideways after the all-time highs in November 2021. Over the last four month, the BTC price has already corrected more than 40% so far. Analysts are saying that if Bitcoin fails to hold its crucial $37,000 support on a closing basis, we can expect a further downside to $30,000.
Many analysts are saying that this could be the beginning of another crypto winter as witnessed in 2018. Crypto winter suggests a prolonged time period of market consolidation before a major bull run.
Recently, Ethereum founder Vitalik Buterin suggested that crypto winter could be actually beneficial for the long term as it will weed out unsustainable players from the market.