US President Announces Sanctions on Russia, Bitcoin Soars to Highs of $39.8K – What Next?

Bitcoin (BTC) and the stock market have recouped some of their recent losses, prompting traders to speculate that the panic sell-off could “end in a matter of days.”

Global financial markets and crypto markets have taken a hit over the past 24 hours as Russia launched a “all-out invasion” that prompted investors to sell off most asset classes. Data from TradingView shows that bitcoin price hit a low of $34,333 in the early hours of trading on February 24, just after the invasion of Ukraine began.

However, the situation changed with bitcoin rallying to $2,500 within an hour of comments about US President Joe Biden’s invasion.

Biden announced that Russia’s aggression “will not only go unanswered” but that Russia’s four largest banks in the US and its western allies will be sanctioned. He said they would “restrict their ability to do business in Russian dollars, euros, pounds and Russian yen”.

The US President also promised to send more troops to Germany to support the NATO alliance along the eastern flank. However, he also clarified that no troops would be deployed directly to Ukraine to engage in the conflict.

Bitcoin immediately responded to the news. exactly one hour later, it surged from $36,300 to $39,844. This could be seen as an unexpected short squeeze that investors setting up short orders could suffer from.

BTC/USDT price chart | Source: TradingView

Here’s what some analysts are saying about the BTC price and how the ongoing conflict could affect the crypto market in the near-term.

BTC in a “perfect buy zone”

Bitcoin’s drop on Feb. 23 was not unexpected for most traders and according to Pentoshi, BTC price could rally towards $40,000 in the near term.

BTC/USDT 3-day frame chart | Source: Twitter

Despite such a positive outlook, Pentoshi remains wary of “general macro factors” that are “looking pretty grim.”

In a follow-up tweet on Feb. 24, Pentoshi was adamant in his prediction that BTC will eventually surge higher from here.

“BTC is now in the blue buy zone. Not quite the way I was hoping for. I think that would be a perfect buy zone.”

A slight correction from May 2021

David Lifchitz, Managing Director and Chief Investment Officer at ExoAlpha, offered a more detailed assessment of the current situation, noting that “Bitcoins and other cryptocurrencies have risen and fallen in line with news i.e. Russia/Ukraine”, i.e. the decline in cryptocurrencies and Other assets to follow “first attack in Ukraine”.

On a positive note for the crypto market, there is less leverage than during the May 2021 bear period, resulting in “fewer liquidations for overly leveraged players and therefore the correction is milder than May.”

Pointing to the fact that Bitcoin’s recent low of $34,300 is “almost at the bottom of the range it’s been trapped in for weeks,” Lifchitz suggests that “the trend of Bitcoin and other cryptocurrencies has been bolstered by the situation.” between Ukraine and Russia will be motivated in the next few days”.

Leaving aside the short-term implications of this conflict, Lifchitz said: “One important issue to keep in mind is that central banks raising interest rates will not be too difficult to contain inflation, but will be enough to create more pressure exert on the economy and The stock market.”

“The most uncertain landing in 12 years of easy central bank monetary policy is underway, and Ukraine-Russia could be the very tipping point that ‘every bubble’ is looking for…”.

The initial panic is over

A final look at how the market will trade over the coming days and weeks comes from independent market analyst Michaël van de Poppe, who did so post Office The following tweet suggests that the worst of the short-term weakness may be over.

“The panic will pass in a few days and possibly weeks. The market is reacting as gold will correct, riskier assets like stocks and bitcoin will rise. There is a possibility of 20-45% price drop in altcoins.”

Analyzing what will happen next for BTC if the panic lingers, trader AngeloDOGE pointed to support at $25,000 if the bears break $33,000.

“Bitcoin is less likely to hold $33,000 on the bear’s second visit. There are worse times before they can get better. If support fails, $25,000 will appear next. Hope for the best, prepare for the worst and stay away from leverage.”

The total crypto market cap is currently $1.649 trillion and Bitcoin’s dominance is 41.9%.

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