Cryptocurrencies were trading in the red on Thursday morning as global investors fled to safer havens after Russia launched a military strike against Ukraine.
According to CoinGecko, Bitcoin dropped by 7.9% in the last 24 hours, while Ether dropped by more than 10% in the same time frame. Long-tail assets were hit even worse, with Avalanche, Shiba Inu, and Cardano all dropping by double digits. Chris Hermida of Manna Trading stated,
“Big risk off move across the board.”
The cryptocurrency market’s price behavior once again demonstrates how liquid tokens have following global stocks, similar to how it has done in the wake of the US Federal Reserve’s intention to raise interest rates. The revelation from Ukraine is expected to add to the pressures already exerted on a world economy beset by rising inflation and supply-chain issues. At the time of writing, the Dow Jones Industrial Average plunged more than 2.23%.
Indeed, this is the latest instance of bitcoin having failed to deliver on its promise of serving as a hedge against numerous sorts of risk. Its 30-day association to gold, which has historically been considered a safe haven asset in times of economic turmoil, fell from 0.28 on February 16 to 0.17 on February 22, whereas bitcoin’s association to the S&P 500 increased.
Investor fear of the crypto market, according to Genesis Trading’s Joshua Lim, is causing the rise in association involving Bitcoin and US equities, with Bitcoin moving “on a 2ish beta to the SPX.”
Gold along-with crypto pulled back due to Russia-Ukraine war
Gold, which had been on the rise amid rising concerns between Russia and Ukraine, began to fall on Thursday morning, along-with crypto price. Russia may be compelled to liquidate some of its gold reserves to finance its military effort, according to JPMorgan.
Traders are keeping a close eye on Ethereum in the short term, considering the massive number of on-chain sell-offsoffs that would occur at the $2,100-$2,200 mark.
In other news, while global forces have pushed bitcoin to new lows beyond $34,000, one CEO pointed to a potential saving grace: institutional capital on the sidelines. At the time of writing, Bitcoin (BTC) was priced at $39,442.87 and had rised by 8.82% in the last 24 hours.