Cryptocurrencies struggle to hold onto their gains as Russia-Ukraine tensions intensify

Crypto markets have been following the overall trends of stock markets, experiencing heavy losses as the crisis in Ukraine has turned investors’ interest towards safer assets.  A bullish trend has prevailed over the past couple of weeks though, driving cryptocurrency prices up. 

On Monday, reports of renewed Russian attacks against Ukraine have dashed hopes for a diplomatic resolution of the conflict any time soon, putting pressure on risk assets. Diplomatic talks continue, although a de-escalation of the crisis still seems to be some way off, and tensions between Russia and Ukraine intensified.

Last week, Bitcoin prices climbed as high as $48,000 for the first time since the beginning of the year. On Monday however, BTC price retreated, trading sideways around the $46,000 level. If Bitcoin price falls, it may find support at $37,500 and $36,000, while resistance may be found near $48,200 and further up at the psychological level of $50,000. 

Most major cryptocurrencies have rallied over the past couple of weeks, with Ethereum outperforming Bitcoin recently, as the release of a long-awaited software upgrade in Ethereum seems to be drawing near, boosting its price. Ethereum price also climbed last week, reaching above the $3,400 level resistance, to the $3,500 level. ETH price was more stable on Monday, ranging between $3,400 and $3,500. If Ethereum's price falls, it may find support near $3,075. In case its price goes further up, it may find resistance near $3,800.

The shift of major central banks towards a more hawkish fiscal policy has also been putting pressure on cryptocurrencies over the past few months. Most major Central Banks are turning towards a tighter policy and a return to pre-pandemic interest rates, driving cryptocurrency prices down. On the other hand, investors are starting to use cryptocurrencies as a hedge against inflation, which could provide a boost to crypto markets, as inflation is expected to peak in the following months.

In addition, most major cryptocurrencies have received a boost over the past couple of weeks, as demand from Russian and Ukrainian markets increased. Bitcoin volume from Russian markets has increased considerably, as Russian investors aim to escape the plummeting Rouble and Russian sanctions. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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