Bitcoin soared over 17% in the previous 24 hours, alongside gold, which put on 2% in value.
The unison could suggest a reclaim of BTC’s safe-haven status.
Alpha crypto’s rally could be a bull trap.
The ongoing war in Ukraine caused uncertainty on the markets.
YEREVAN (CoinChapter.com) – Bitcoin (BTC) rallied over 17% in the previous 24 hours. The flagship cryptocurrency broke the $40,000 psychological resistance and settled at around $44,600 in Tuesday’s European session.
The soar in BTC price came in unison with a spike in gold value, which could mean the alpha crypto put its safe-haven hat back on.
In hindsight, as CoinChapter repeatedly reported in the previous week, Bitcoin’s safe-haven status, found amid the 2021 pandemic, was compromised by the rising correlation between BTC price and the stock market. Thus, Bitcoin joined the “risk-on asset” club, abandoning its safe-haven ‘duties.’
Many experts, like Charles Hoskinson, the man behind the 8th-largest crypto Cardano (ADA), saw the primary function of the crypto market in providing an alternative to the fiat economy, i.e., being a safe- haven. Thus, the CEO characterized the correlation with risky assets as “surprising.”
Bitcoin rallies alongside gold. A bull trap?
However, Bitcoin’s recent rally came amid the yellow metal’s 2% upside move in the previous 24 hours, suggesting a possible correlation. Gold traded at $1,924 for an ounce, its highest value since Jan. 2021.
Bitcoin (BTC) and gold charts in a possible correlation. Source: TradingView.com
Furthermore, a crypto analyst and entrepreneur with the Twitter Handle Credible Crypto, expected Bitcoin’s dominance to decline shortly. But not before the price returns to its previous all-time high of $69,000 or more.
The strength on $BTC over the last couple of days is a sign of what's to come imo. Still expecting BTC to lead the charge on this next wave and for alts to *initially* take a back seat. Alts may see some relief against BTC until then but when BTC starts impulsing it will be epic. https://t.co/2Ha0z7OCCB
On the contrary, Michel Van de Poppe, the CEO of consulting firm Eight Global, asserted that the Bitcoin’s uptrend might correct shortly. Thus, the BTC jump amid the chaos could be a “bull trap,” i.e., a false bullish signal during a declining market.
A likely chance here is the fact that #Bitcoin is going to correct and altcoins are going to bounce a little in their $BTC pair, as they are bouncing a little already.
Just some open thoughts.
— Michaël van de Poppe (@CryptoMichNL) March 1, 2022
While analysts debate over the possible outcomes for the crypto market, the raging war in Ukraine continued with new threats to the international economy.
Market uncertainty amid the war in Ukraine
Given the prior congruence with the stock market, the war in Ukraine did not initially put Bitcoin in the spotlight. The latter appeared logical, as, in times of economic uncertainty, equities typically take a back seat, while traders are reluctant to go after risky assets. Thus, the ripples from the European war had a global outreach and kindled the FUD, hurting stocks, and the crypto market as well.
In a nutshell, Kremlin’s decision to invade Ukraine had been cooking for more than a month. The tension peaked on Feb. 24, when Russian troops invaded the Ukrainian Luhansk and Donetsk regions. Notably, Vladimir Putin conveniently declared their independence a day prior to the attack.
As a result, the U.S., the European Commission, and several other allies banned a number of Russian banks from SWIFT, an international messaging system that banks use worldwide. As a result, the Russian Ruble plummeted 25% against the U.S. dollar since Feb. 17.
Lilit is a Yerevan-based Markets writer, skilled in 3 languages, and interested in writing about the tech world, trading, art, and science. She also has a background in psychology and marketing, which helps deliver the right message to the target audience.
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