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BTC: geopolitics wreaks havoc on crypto industry

Bitcoin has been resolutely on the backfoot on Monday, February 28 as risk-sensitive assets come under heavy geopolitical pressure. The performance of the leading digital currency could depend on the outcome of peace talks aimed at resolving the situation in Ukraine. There has also been a downturn in crypto industry activity as “digital gold” has finally lost its status as a safe haven asset, due to the decoupling from precious metals.

Notably, the Fed’s upcoming rate hike could be put on hold, as market participants hope, due to the imposition of tough sanctions against Russia. Steep growth in the cost of raw materials, as well as non-ferrous metals, could prompt the US Federal Reserve to hold off on increasing rates in March, or opt for a smoother and less painful 0.25 bp rate hike. Such a step on the part of the regulator could act as a growth driver for the entire crypto industry.

Technical analysis

Bitcoin is trading in a border zone, nearing the bottom of consolidation at $38k. Meanwhile, the prevailing downtrend has not been broken, which means that there is a high likelihood that this trend will gain traction. If the bears regain control of the crypto market, we can expect to see a sluggish breakout to the downside, down to $34k.

Top 100 crypto outperformers and underperformers by market cap

Waves: $12.71 (+7.96%)

Convex Finance: $16.27 (-13.88%)

Industry news

The disconnection of Russian banks from SWIFT and other financial sanctions against the Russian Federation is a long-term positive for the cryptocurrency market. This opinion was voiced by the founder and CEO of Lebit Mining Pool Jiang Zhuoer.

Valve President: 50% of Bitcoin transactions on Steam were fraudulent.

Bank of America analysts see no reason to expect a large-scale "crypto winter".

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