Bitcoin (BTC), the world’s largest cryptocurrency, fell below $40,000 on Saturday as a recent sell-off on growing Russia-Ukraine tensions and Canadian crypto regulation showed little signs of stopping.
The currency, which has been steadily declining through the week, fell 0.3% to $39,994, hovering around two-week lows. It had briefly breached the key $40,000 mark on Friday, having slumped more than 10% from a five-day peak hit earlier this week. While some analysts view $40,000 as a key support point for the currency, other see it depreciating further this month.
Bitcoin slips below $40k
The currency also fell below its 50-day moving average on Thursday.
Crypto markets have tumbled this week, tracking losses in broader markets following a warning from the United States that a Russian invasion of Ukraine is imminent.
Tensions over Russia wiped $160 billion off crypto market capitalization this week.
“Bitcoin and the wider digital token space have edged into the red zone amid a sense of nervousness sweeping across all financial markets,”- Bitfinex traders.
“We may once again see bitcoin converge with stocks and other risk assets, amid growing concern of a potential Russian invasion of Ukraine.”
Canada Sanctions More Crypto Wallet
Canadian sanctions against crypto wallets linked to the ongoing trucker protests also rattled markets with the possibility of stricter government regulations. The move had drawn widespread ire from the crypto community.
The crypto fear and greed index, a prominent gauge of market sentiment, sank to a two-week low of 25, indicating extreme fear.
Still, bitcoin and broader crypto volumes have been steady through the week. Bitcoin has also seen a steady rise in users despite being in a bear cycle- indicating that a sharp recovery may be on the cards.
Crypto market capitalization had slumped 30% to $1.5 trillion earlier this year, driven by concerns over inflation and interest rate hikes in the United States. Since then, the market has recouped some of its losses, but is still trading about 19% down for the year.
With more than five years of experience covering global financial markets, Ambar intends to leverage this knowledge towards the rapidly expanding world of crypto and DeFi. His interest lies chiefly in finding how geopolitical developments can impact crypto markets, and what that could mean for your bitcoin holdings. When he isn't trawling through the web for the latest breaking news, you can find him playing videogames or watching Seinfeld reruns. You can reach him at ambar@coingape.com