Key Takeaways:
- 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.’
Also read: Bitcoin falls below $35K, gold rallies as Russian army invades Ukraine.
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.
Also read: Ukraine crisis: Calls for Bitcoin ban emerge following SWIFT sanctions on Russia.
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.
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.
Also read: Bitcoin is a weapon system, says U.S. Space Force, as Russia threatens a nuclear response.
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.
Also read: Crypto exchanges refuse to punish all Russian users for Putin’s war crimes.
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.
