Cryptocurrencies are expecting a deeper plunger as Russia continues to launch a military strike in Ukraine. Explosions have been heard in Kyiv and other cities across Ukraine as missiles were launched by Russia. Ukraine claims more than 40 soldiers have been killed, scores of civilian deaths, and a few dozen injured.
Mark Haefele, the chief investment officer at USB Global Wealth Management, said heightened volatility on the escalation of the conflict highlights that markets had not fully priced in the likelihood of a deeper conflict. He expects continued volatility in the near term as world leaders announce their response to the escalation.
Global equity markets have also taken a tumble. According to CoinMarketCap data, more than $150 billion has been wiped off the cryptocurrency market in the last 24-hours. The world’s most popular cryptocurrency bitcoin dropped more than 8% to $34,702. The crypto touched its lowest level in a month.
Analysts have highlighted the drop in the crypto market as correlated to movements in other risk assets such as stocks. Vijay Ayyar, the vice president of Luno, pointed out that risk assets are being weighed down by the Russia-Ukraine conflict. It includes bitcoin and other cryptocurrencies which are still being regarded as a high-risk asset class.
Ayyar predicted that BTC could slide further to the $30,000 mark with key low levels being $28,000 and $29,000. If bitcoin somehow stays over that, the crypto market could move to new highs later this year. However, if it falls below that, it’s likely for bitcoin to slip to $20,000.
It should be noted that ever since bitcoin hit an all-time high of $69,000 in November 2021, cryptocurrencies have been under pressure. Bitcoin has fallen nearly 50% since then.