Bitcoin tests a key psychological position of $40,000 as the U.S. plans to negotiate with Russia. Military intelligence points to an imminent Russian invasion of Ukraine, but Russia denies it.
Bitcoin, the world’s largest cryptocurrency, is on track for its first weekly loss since January, pausing its recovery from a dramatic decline late last year. Bitcoin fell as much as 1.4% on Friday and has lost about 5% in the past seven days. Ether was little changed on Friday, while other popular virtual currencies including Solana and Cardano were in the red, according to CoinGecko.
“With the situation in Ukraine still unresolved, traders took some risk positions and are now turning to safe-haven asset classes like gold and silver,” said Nathan Batchelor, chief bitcoin analyst at SIMETRI Research. “Bitcoin’s drop wasn’t as dramatic as expected, though, and with all the geopolitical uncertainty, it still caught me by surprise at $40,000.”
Tensions in Europe have prompted a rotation into safe-haven assets, such as gold, which has rallied over the past three weeks. Although dubbed “digital gold,” Bitcoin’s sensitivity to broad market sentiment has affected the often-touted hedging appeal of many proponents. Conversely, Bitcoin has largely followed the major stock indexes recently, showing strong correlations with the S&P 500 and Nasdaq 100.