According to analysts, a bleak confluence of macro triggers has converged on Bitcoin, and risk assets are in for a “rough” few days. Bitcoin (BTC) begins the new week amid a deepening geopolitical nightmare in Ukraine. As retaliation for the Ukraine invasion and the resulting macroeconomic consequences intensify, crypto, in general, is struggling to keep up.
This month has brought to light an intriguing paradox. Even though investors and those directly impacted by the war were presumably looking for a haven, Bitcoin and even stablecoins were not among them. Instead, stocks, which have suffered due to sanctions and their consequences, are now a major guide for investors.
As a result, Bitcoin’s trend remains downward, all within the same familiar macro range that has characterized 2022. The macro forces indicate a volatile, “rough” week ahead.
Aside from historical precedent, it is clear that the stock market does not “like” the current European hostilities.
Last week’s losses accelerated, with global equities losing $2.9 trillion in value. Add to that a warning that indices continue to appear expensive in the current environment, and the midterm picture becomes decidedly unappealing.
Moreover, what has already occurred causing concern, but new sanctions against Russia are being considered, including some serious issues that would only be felt over longer time frames if implemented.
Among them is a ban on Russian oil imports, which can increase the global status quo and cause a seismic shift in how the economy fuels itself.
“If something like this happened. “I would think there’d be a high likelihood of stocks limiting down immediately off the news,” popular trader and analyst Pentoshi said in response to the idea’s announcement over the weekend.
Pentoshi had already issued a warning for stocks in the future, speculating on a Wall Street Crash-style event sparking a modern-day equivalent of the Great Depression. While this is an extreme scenario, there is little optimism as long as the conflict is unresolved and the fallout worsens.
When comparing BTC/USD to the Nasdaq this year, McGlone did not believe that the only way is down. “Bitcoin faces deflationary forces after 2021 excesses, but the crypto shows divergent strength,” according to a portion of Friday’s Twitter comments.
Also Read: As Bitcoin Heads Towards 36, Analysis Warns For Expensive Consequences Due to Global Stocks
If this is the case, Bitcoin investors will be in for a bumpy ride in the coming days.
Some say that sensitive stocks combined with skyrocketing commodity prices — a stagflationary environment — do not make for fertile ground for bullish sentiment.
Overnight on Sunday, BTC/USD fell to $37,592 on Bitstamp, its lowest level since late February, and completely erased its previous gains.
A look at the daily chart from Cointelegraph Markets Pro and TradingView shows how persistent the range has been — a breakout above the yearly open at $46,200 is required to exit it. However, according to trader Matthew Hyland, the immediate picture suggests that such a move is unlikely.
“Bitcoin has fallen below the critical support zone,” he warned on Monday, displaying the various price levels he believes represent support and resistance in the range.
The most recent of these to fall — around $39,600 — happens to coincide with the closing price on CME Group’s Bitcoin futures market on Friday. Given Bitcoin’s propensity to revert to Friday close levels the following week, the area just below $40,000 may become a focus on Monday.
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