Crypto Market in Red as the Investors flee amidst the fear of Russia-Ukraine Tension Escalation
“Bitcoin, the largest cryptocurrency by market capitalization has breached an important support of $42K as the whole crypto market is in red due to the fear of Russia-Ukraine tension escalations, worldwide inflation being another concern.”
At the time of writing Bitcoin is exchanging hands at $40,650 which is a 6.91% drop in the last 24 hours whereas Nasdaq is down by 2.88% and S&P 500 down by 2.2%. The sudden sell-off is the result of the fear in the market caused by the Russia-Ukraine tension escalation. The fear has led to a fall in all the risky asset classes including crypto and stocks.
The crypto investors are on their defensive posture as the reports of Russian Mortar Shelling and building destruction in Ukraine circulated around the news channels yesterday. The investors have taken less risky positions since then resulting in a short-term sell-off. The market is expected to see more downside until the issue between Russia and Ukraine resolves.
Another reason for the constant FUD in the market is the continued fear due to the hawkish behavior of the Feds to tackle the rising inflation. The market expects the Feds to raise the interest rates by a whole 50 basis points starting from March which could again put selling pressure on the market resulting in high volatility for the month of March. The crypto market in the last couple of months has been under the pressure from the macro-environmental conditions and is expected to last for another month before a move to the upside can be seen with regulations on the horizon later in the year.
The fear and greed index has turned to the state of “fear” in a single day dropping from a neutral value of 52 to a fearful value of 30, depicting the cautious investor sentiment.