Overnight Bitcoin once again updated local lows at $36340, after which there was a slight rebound that brought the main cryptocurrency close to $37K.
Equity markets are under pressure due to geopolitical tensions, while oil, gold and silver are rising. Gold has reached levels last seen in 2020, with oil continuing to target $100 a barrel.
Russia yesterday gave a sudden acceleration to events in the crisis in Ukraine, recognising the Donbass republics and signing agreements on cooperation and mutual assistance. During the night Russian army units entered the territory of the Donbass, launching a peace keeping operation (according to the Russian authorities).
I believe that from now on the tension will begin to decrease, in fact it is unlikely that the Ukrainian authorities will consider the possibility of an attack on the Russian units of the regular army, especially after Biden clearly told Zelensky (President of Ukraine) to resolve the situation exclusively through diplomacy.
I think that at this point the matter is closed. There will be declarations of circumstance from NATO and Western countries, proclamations and sanctions.
Ukraine will probably receive money and support, but the tension in the Donbass will now calm down, because on the one hand Ukraine does not have the capacity and strength to change the status quo and on the other hand Russia has no intention of forcing its hand any further, having achieved its strategic goal.
On the crypto front, the correlation between bitcoin and stock markets is back at an all-time high, in fact after Russia's blitzkrieg the main cryptocurrency went from $39000 to $3,500, following the stock markets crash.
Needless to post the usual Glassnode charts because in
In addition to the geopolitical turmoil, there was also the FUD spread by some celebrities such as Vitalik Buterin (founder of Ethereum), who announced the imminent start of a long term bear market, the infamous Crypto winter.
Nassim Taleb is also back on the scene again, the same character who called bitcoin owners idiots in the summer of 2020 (with the coin at $10K, nda).
In the short term, the local support to be preserved is in the $35500/36500 area, also because losing that level would mean a lower low on the daily chart.
In general, there is still a large number of traders who have bought coins at prices ranging from $40,000-50,000 (dashed rectangle) and therefore now if they were to sell they would have a loss. This market share corresponds to 54% of the total coins available in the exchanges.
In essence, any further decline in prices could occur, either due to sales by the 10.9% of traders who bought most recently (mentioned in the previous post), or in the worst case, sales by a larger group of traders, namely the 54% of traders who bought throughout the last bull market.
However, so far we have seen that there has been exceptional resilience from this 54% who, unlike other cycles in the past, did not sell en masse at the end of the bull market, but joined the group of "holders" (we saw this in detail in the previous Tuesday's charts).
Despite the recent declines, this situation has not changed and may remain unchanged for a long time, even until the next bull market.
At this point, the only factors that could worsen the situation should not be sought in the fundamentals of the crypto market, which remain in good health, but in the increasingly intrusive external factors, starting with geopolitical intemperance and media scaremongering.
The situation is well illustrated by this chart, which shows the size of traders' losses relative to total market capitalisation.
When the btc fell to 33,500 dollars, the percentage of losses had already reached the limit that is only exceeded in the short, sharp phases of the decline (i.e. when the lower side of the area highlighted in pink).
In the successive reductions, this threshold has been touched again, but it has shown to work like support.
As I said, only a real external crisis (pandemics, wars, etc.) could force the resistance of this support and cause a market crash (also in the traditional stock market, of course).
On the fundamentals front, El Salvador's 2021 GDP figure jumped to 10.3%.
Numbers never before seen by the Central American country, "coincidentally" after it recognised Bitcoin as legal tender.
Cheers to the sea of suckers who still continue with the narrative of El Salvador being a dictatorship, in the hands of gangs, with the people rebelling against bitcoin and company. And now that the issuance of the "Volcano Bonds" is going to go live, I think we're going to see some good stuff.
I didn't think it possible that in 2022 there would be another 2018 - 2019 style opportunity, when those who had the patience and foresight to build a good long-term wallet then generated "generational" wealth (bitcoin at $3000 and Ether at $100, nda). It is a different story for those who lost patience and confidence in those years, selling at a loss and missing a momentous opportunity.
It is perhaps for this reason that at this stage bitcoin holders continue to rally without selling a single satoshi; they have learned their lesson