There is fear in the markets over Russia’s troop build-up on the Ukrainian border. The world press has been warning of a possible Russian attack on Ukraine. This has caused cryptocurrency BTC to plunge to its six-month low.
This fall comes just before the Fed’s meeting planned later this week.
After the initial fall to an all-time low since Jul 2021 to $32,951, bitcoin rose by 2.5% to $37,250. Despite the rise, the total losses in BTC went past 50%, considering that BTC in November was at $69,000.
Analysts fear that any more selling of bitcoins would cause a reversal in its bullish trend that has held for long now. BTC had earlier fallen following the news of a possible Russia-Ukraine conflict.
To compound the bad news, NATO said that it was moving troops, aircraft, and ships to Eastern Europe as standby. This was to reinforce Ukraine’s forces. This move prompted Russia to accuse NATO of being responsible for the escalation of tensions in the region.
Adding to the tension of possible conflict was the announcement by the Fed that it would be meeting on Tuesday. The Fed has earlier announced that it would soon start removing the liquidity from the market. The sloshing liquidity had made for a super buoyant global stock market.
If the Fed decides to clean up its balance sheet, it will make the conditions tighter because of the raised rates of interest.
Along with the stock market, cryptocurrencies also witnessed a fall. Analysts feel that if BTC closes above $37,400, it would be an indication of whether the sell-off is a correction towards an upward trend or it could be the start of a bear trend.
Investors and traders, in the past day, have liquidated $465 million worth of crypto assets. Of this, BTC alone accounts for $167 million. Other cryptocurrencies, that are smaller tend to mirror BTC’s trends. A downward trend was witnessed in the value of these cryptocurrencies as well.