Since the middle of last week, the price of Bitcoin has been steadily descending in the face of escalating tensions on the border between Ukraine and Russia. At the time of publication, the price of Bitcoin has already fallen below $38000 and continues to decline.
Statements by Federal Reserve Chairman Jerome Powell that the Fed would start raising rates at the March meeting in response to persistent inflationary pressures as well as rising global tensions prompted investors to shift their capital from the cryptocurrency market to the gold market.
Under the threat of inflation and global risks, investors considered cryptocurrencies as a tool to preserve capital. However, recent events show that Bitcoin has begun to react to ongoing events in the same way as traditional instruments. Bitcoin’s price movement resembles that of the S&P500, while gold prices reached an eight-month high. Investors have traditionally gravitated towards hard tangible assets like gold. It seems that stocks and now Bitcoin is not included in this number.
On the 4-hour chart, the BTC/USD pair broke down the uptrend line and dropped below the 100-hour moving average. The pair fell below the important support levels of 40000, 38000. A breakdown of this level gives us reason to believe that the BTC/USD pair will drop to the area of 36800 shortly.
If the BTC/USD pair manages to stay above the level of 38000, we will see consolidation and movement around the level of 38000 level. Finding the BTC/USD pair above the level of 38000 will give reason to expect a move to the area of 39000.
