Major Cryptos Drop as Russia Takes Military Action Against Ukraine

Ukraine News & Crypto Reaction

A few hours ago, Russian President Vladimir Putin announced a special military operation in Ukraine, in a televised address. [1]

The Ukrainian Presidency called this "an unjustified deceitful and cynical invasion", reported "strikes on military and other important defense facilities" and declared martial law. [2]

Ukrainian Foreign Minster Mr Kuleba called for "Devastating sanctions on Russia NOW", including cutting it out of the SWIFT payment system. [3]

Western countries have condemned the attack and pointed to further sanctions against Russia. EU Commission President Ms von Der Leyen announced a few minutes ago that "We will freeze Russian assets in the EU and stop access of Russian banks to our financial market". [4]

Cryptocurrencies take a hit as risk aversion hits markets and FXCM's Cryptomajor Basket sheds around 8% at the time of writing. BTC/USD loses around 5% and it is worth noting that Russia is the third largest Bitcoin mining country, behind the United States and Kazakhstan, as of August 2021, as per the Cambridge Centre for Alternative Finance data. [5]

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As we had commented in our last analysis, although it has shown some traits of a safe-haven from time to time, it has definitely not been able to act as such, during the Ukraine crisis.

BTC/USD is in danger of new 2022 lows (32,939), but fresh catalyst is likely needed for a bigger decline towards 27,892.

The cryptocurrency however, finds support after the initial plunge and it may be able to to push back towards 39,285, but a significant change in sentiment is needed for sustained recovery that will allow it to challenge key 41,700-42,568 area.

In any case caution is needed as volatility is high and the Ukraine situation is fast-moving.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 24 Feb 2022 https://www.youtube.com/watch

2

Retrieved 24 Feb 2022 https://www.president.gov.ua/en/news/rosiya-rozpochala-novu-vijskovu-operaciyu-proti-nashoyi-derz-73105

3

Retrieved 24 Feb 2022 https://twitter.com/DmytroKuleba/status/1496711163530424324

4

Retrieved 24 Feb 2022 https://twitter.com/vonderleyen/status/1496751829694046209

5

Retrieved 03 Jul 2022 https://ccaf.io/cbeci/mining_map

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