Bitcoin is testing $40,000, a key psychological level, as the U.S. plan talks with Russia about military intelligence that suggests an imminent Ukraine invasion, which it denies. Since January, the world’s largest cryptocurrency by market capitalization, bitcoin, has been on track to notch its first week of losses, putting a halt on the token’s recovery from its dramatic year-end slide.
Bitcoin is down 5% over the past seven days.
The leading cryptocurrency is down 5% over the past seven days after Friday’s drop of as much as 1.4%. The second leading cryptocurrency Ethereum was little changed on Friday, while other popular tokens, including Solana and Cardano, were in the red, according to CoinGecko. Traders are taking some risk off the table as the Ukraine situation is still not resolved and are now moving into safe-haven asset classes such as gold and silver,” said Nathan Batchelor, lead Bitcoin analyst for SIMETRI Research. “However, the decline in Bitcoin has not been as dramatic as you may expect, and I am impressed that Bitcoin still commands a value of $40,000 with all the geopolitical uncertainty.”
Tensions in Europe have prompted traders to invest in risk-off assets like gold.
Tensions in Europe have prompted a rotation into so-called risk-off assets like gold, which has gained over the past three weeks. Although referred to as “digital gold,” Bitcoin’s sensitivity to broader market sentiment has weighed on its hedge appeal often touted by advocates. Instead, it has largely followed movements in major stock indexes lately, exhibiting strong correlations with the S&P 500 and Nasdaq 100. “We’re all trying to figure out what crypto’s identity is right now,” said Callie Cox, U.S. investment analyst at eToro. “Is it a store of value? Is it an inflation hedge? Is it this highly correlated asset to stocks? Right now, crypto is really falling into that stocks bucket.”