Bitcoin has been moving sideways during the past week with a 0.7% profit as it trades at $42,709. The first crypto by market cap has held on to critical support as it was rejected at the mid area of its current levels.
The Russian Federation has been making several bullish announcements regarding cryptocurrencies, but as Hasegawa claims, the country could be preparing to use digital assets in case the situation escalates into a full-on conflict with Ukraine and a NATO intervention. The analyst said:
(…) this move may be a crafty preparation to circumvent the possible financial sanction–like exclusion from the SWIFT–that could be enforced once the country starts to attack Ukraine. If this is the case, it could be bad press for bitcoin and the crypto industry as a whole, and it might spark a discussion to further regulate cross-border crypto payment.
In this scenario, Bitcoin could extend its gains as investors acquire the cryptocurrency and precious metals to protect their wealth. However, any profits could be short-lived if the Russian-Ukraine situation impacts the U.S. stock market.
Data from Material Indicators shows that Bitcoin could see support around the $41,000 area as $10 million in bids orders sit at those levels. $40,500 could mitigate any downside in case previous levels fail with $39,700 acting as the last line of defense against a return to previous lows.
To the upside, Bitcoin faces major resistance as there are over $20 million in ask orders sitting at $44,000 alone. These orders could prevent any future bullish momentum to gain significant terrain, but they could also be operating as a psychological barrier and could be removed if the market shows strength.
Bitcoin (blue in the chart) moving into major resistance zone on $44K (white line above chart representing ask orders). Source:
Bitcoin Investors De-Risk Their Positions
A separate from Glassnode Insights concurs with Hasegawa’s thesis and the fears about a potential conflict between Russia and Ukraine. These uncertainties were priced-in by the derivatives sector with the “futures term structure curve until March”.
Bitcoin and crypto investors are de-risking their positions in futures and have been taking put options to hedge against any future downside. Glassnode added:
Simultaneously, on-chain supply dynamics are remarkably stable, a likely indication that investors are prepared to ride out whatever storm lies ahead, preferring to utilize derivatives to hedge out risks. Overall, this speaks to the continuing maturation of the Bitcoin market, as liquidity deepens, and more comprehensive risk management instruments become available.
A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.
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