Bitcoin posted some much-awaited recovery after nearly approaching the $44k mark on 28 February 2022. This comes close on the heels of heightened negativity among investors towards the dominant coin in 16 months. Altcoins too followed a similar trajectory with many prices returning to mid-February or earlier levels.
This price surge took many traders by surprise in the backdrop of looming geopolitical tensions that were already causing market stagnancy. In fact, as rumors of war evolved into full-scaled reality, prices swiftly dropped. However, less than 24 hours after Putin’s official announcement, the market cap had managed to salvage some of its losses as it nears $2 trillion.
According to prominent data analytical platform Santiment, markets have remained hesitant and stayed in a ranging pattern for most of the past few days prior to today’s breakout. But sentiments took a deep turn to the south, as social commentary began to shift negatively, as per the report.
Santiment in its report observed that in the past, after a week of FUD and negative posts from the crypto communities, prices tend to bounce back higher. However, the report cautioned of short-term volatility that may impact given the rapidly evolving global political environment.
Is Bitcoin bouncing back only a short term affair?
The insight also raised the close correlation to global stocks which it termed as ‘concerning’ and that drifting away from it will be a ‘great sign’. Reading along with the same, the report added,
“Any breakout away from this kind of correlation, which today was a very good early sign, is excellent as a signal for a continued breakout for BTC and the rest of crypto.”
On the other hand, some analysts continue to remain cautious about geopolitical risks despite Bitcoin [BTC] and other cryptocurrencies trading higher on Monday.
Data from Glassnode indicated that a large portion of Bitcoin held by investors at around the $60,000 price level has found new buyers at the $35,000-$38,000 price range. That hint of a possible short-term price low. Some speculators however feel that BTC could follow a similar recovery pattern given its strong correlation with the S&P 500.