Bitcoins [BTC] improvement in the issue as the anniversary of the conflict between Russia and Ukraine approaches
- Establish how the Russia-Ukraine war has affected Bitcoin.
- Bitcoin bulls give way to bears after critical support area.
Bitcoin [BTC] bulls have been questioned despite the rally they have delivered so far this year. There are several reasons why many analysts expect prices to remain depressed, one of which is the ongoing conflict between Russia and Ukraine.
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Bitcoin was initially on a healthy upswing before the war started to have a negative impact, especially in the form of inflation. This was due to unstable conditions caused by such conflicts discourage investment.
On the other hand, Bitcoin proved to be more useful to those affected, whether in Ukraine or Russia, as it became one of the most accessible forms of money. However, the risk of another big retracement will remain.
Will an extended war trigger more pressure for Bitcoin?
The conflict in Ukraine does not have a direct correlation with Bitcoin. It is only one of the indirect factors that have contributed to inflation and disruptions in the global economy. Meanwhile, the Federal Reserve is slowing its quantitative easing measures that have sucked liquidity out of the markets. This is a major reason why Bitcoin fell in 2022 and why there has been some recovery with falling interest rates.
What does all this mean for Bitcoin in the short term? Well, there is still room for the Fed to raise rates higher to reach the target rate by June. The next FOMC meeting is still a few weeks away, but there are some significant outflows.
📊 Daily exchange flow on the chain#Bitcoin $BTC
➡️ $682.1 million in
⬅️ $778.2 million out
📉 Net flow: -96.1 million dollars#Ethereum $ETH
➡️ $415.4 million in
⬅️ $411.9 million out
📈 Net flow: +$3.5 million#Tether (ERC20) USD USD
➡️ $686.2 million in
⬅️ $670.0 million out
📈 Net flow: +$16.2M— glassnode alerts (@glassnodealerts) 22 February 2023
BTC recently tested a key resistance level of $25,000, triggering some selling pressure. This was exasperated by a price RSI divergence. The events confirmed a trend weakness in the recent price rally and coincided with the expectation of selling pressure at the resistance level.
Source: TradingView
Despite this influence, the MFI indicated that there was relatively little selling pressure taking place at press time. This explained why the prevailing selling pressure is limited. A brief look at whale activity confirmed a general bearish sentiment in the market. Addresses with over 1000 BTC have been selling since mid-February.
Source: Glassnode
How much is 1,10,100 BTC worth today?
The derivatives segment was in line with this view, considering that the options Open Interest plateaued. Bitcoin exchange reserves have increased significantly over the past two weeks as investors moved funds to exchanges. This is also reflected in the waning momentum in the recent bull run.
Source: CryptoQuant
Higher foreign exchange reserves often underline an increase in selling pressure. There has been a drop in both outflows and inflows in exchange in the last 24 hours up to press time. However, inputs remained slightly higher than outputs, hence the bearish outcome.
