Crypto markets are trading higher today with major cryptocurrencies recovering most of their losses over the past two days.
Bitcoin is up 11% to $39,400 in the past 24 hours and Ether has surged 14% to $2,720.
In the early hours of Feb. 24, global markets nosedived after Russian president Vladimir Putin launched a ‘special military operation’ against Ukraine.
Bitcoin dropped 9% to as low as $34,500.
Altcoins fared worse, with Ethereum dropping nearly 12% to an intraday low of $2300 before paring some losses.
Global markets staged a dramatic reversal after news broke that US president Joe Biden would not commit American troops to the conflict in Ukraine. Fears of escalation seem to have subsided for now and investors are showing a renewed appetite for risk.
Despite the sharp drop in prices, liquidations on major exchanges remained under $500M, according to data provider Coinglass. This is much lower than we’ve seen during previous sell-offs, perhaps a sign that investors are being more careful when taking on leveraged positions in light of the geopolitical situation and the US Fed’s much-anticipated March meeting.
Still, not everyone is convinced that the rally has legs.
“The prospect of geopolitical escalation has been the main driver of price moves in the broader risk asset spectrum for the past couple of weeks. Now that the war between Russia and Ukraine has become reality, investors are rushing to take risk off the table and stock markets globally are seeing major declines,” said Anto Paroian, Chief Operating Officer at digital asset investment fund ARK36.
“Given how closely the crypto markets have been correlated with risk assets over the past two months, it doesn’t come as a surprise that the situation is aggressively spilling into the crypto markets with Bitcoin losing more than 8% in a day,” he continued.
Ruud Feltkamp, CEO of crypto trading bot Cryptohopper, said “First of all, I would like to say that I am shocked by the attack on Ukraine. My thoughts go out to the residents and the Cryptohopper colleagues there. I find it unimaginable that this can still happen in 2022.
I’ve been closely watching the markets for a while and was very curious how the Bitcoin price would react to this. I honestly think it’s doing pretty ok. Regardless of the war, I expected a slight move down anyway, after which another $40k retest is expected. Whether this will still happen is, of course, the question.”