Bitcoin price spike to $39K leads traders to say ‘the panic is over for a few days’
Global financial markets and crypto markets were pummeled over the past 24-hours as the invasion of Ukraine by Russian forces sent investors scrambling and sell-offs took place across most asset classes.
Data from Cointelegraph Markets Pro and TradingView shows that the price of Bitcoin (BTC) hit a low of $34,333 in the early trading hours on Feb. 24, shortly after the Ukraine incursion began, and has since climbed its way back to $38,500 after an unexpected short-squeeze may have rapped bearish investors on the knuckles.
Here’s a look at what several analysts are saying about BTC price and how the ongoing conflict could impact crypto markets in the short-term.
BTC in a “great buy area”
Bitcoin’s collapse on the night of Feb. 23 was not unexpected by most traders and according to crypto trader Pentoshi, BTC price could recover the $40,000 mark in the short term.
Despite this positive outlook, Pentoshi expressed wariness “of the overall macro environment,” which “looks pretty dire.”
In a follow-up tweet on Feb. 24, Pentoshi held firm with the projection that BTC will eventually trade higher from here.
Pentoshi said,
“BTC now in the blue value zone. Not exactly the path I’d hoped to take to get here. I think in time this will have been a great buy area.”
A milder correction than was seen in May 2021
A more in-depth assessment of the current situation was offered by David Lifchitz, managing director and chief investment officer at ExoAlpha, who noted that “Bitcoin and other cryptos have been moving up and down in tandem with the Russia/Ukraine news,” so the plunge in cryptos and other assets was expected following “the first, even if surgical, strikes in Ukraine.”
One positive for the crypto market was that there was less leverage at play than during the drawdown in May 2021, which resulted in “less liquidation of over-levered players and hence a milder correction vs. what was seen in May.”
Lifchitz pointed to the fact that Bitcoin’s recent low at $34,300 “was near the low of the range it has been stuck in for weeks now,” and suggested that “the direction of Bitcoin and other cryptos will be driven by what happens in the next couple of days with the Ukraine-Russia situation.”
Aside from the short-term impact of this conflict, Lifchitz stated that “the elephant in the room is the Central Banks rate hikes that won’t be as tough as they should be to tame inflation, but will be enough to put more pressure on the economy and the stock market.”
Lifchitz said,
“A hard landing of the last 12 years of Central Banks lax monetary policy is in progress, and the Ukraine-Russia may just have been the pin the “everything bubble” was looking for…”
Related: Bitcoin rises above $36K as 24-hour crypto liquidations pass $500M
The initial panic is over
A final bit of insight into how the market will trade in the days and weeks ahead was provided by analyst and independent market analyst Michaël van de Poppe, who posted the following tweet suggesting that the worst of the near-term weakness may be over for now.
Honest view; panic is over for a few days/maybe weeks.
Markets reacting in a sense that #Gold is going to correct, risk-on assets like equities and #Bitcoin are going up.
Potentially runs of 20-45% on #altcoins to happen.
— Michaël van de Poppe (@CryptoMichNL) February 24, 2022
Analysis of what comes next for BTC if the panic continues was also provided by crypto trader and pseudonymous Twitter user AngeloDOGE, who posted the following tweet pointing to support at $25,000 in the event that bears break through the $33,000 level.
Low chance #Bitcoin holds $33k on a second visit.
Sometimes things need to get worse before they can get better.
Upon support failure, $25k $BTC comes next.
Hope for the best, prepare for the worst, and stay off the leverage.
— AngeloƉOGE (@AngeloBTC) February 24, 2022
The overall cryptocurrency market cap now stands at $1.649 trillion and Bitcoin’s dominance rate is 41.9%.
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