Bitcoin and 'cryptos' "are displaying a use-case" due to the war: the rally isn't over yet

Bitcoin left rises for the third consecutive day on Wednesday, with a new high slightly above $45,000, prices not seen since February 10th. Despite falling back again on Thursday, the cryptoasset market maintains its positive look and recent gains lead analysts to believe that there is still a fuse left to the 'rally' started in the heat of the Russia-Ukraine war. Some experts are eyeing $50,000 as a short-term target, as digital currencies are gaining prominence in the armed conflict, as "a real use case is being displayed," stated Craig Erlam, an analyst at Oanda.

"The crisis in Ukraine and Russian sanctions offer an opportunity for cryptocurrencies to show their value," the expert noted, "whether through positive means such as donations for aid to Ukrainians," whether to their Ministry of Defense, which has opened a wallet for donations in Dogecoins, or "capital preservation for ordinary Russians, a rare exception where it could be argued that cryptos can be a store of relative value." "Cryptocurrencies are displaying a use case in recent days and that is being reflected in the price, both because of related demand and, no doubt, speculation in its wake," Erlam asserted.

However, other experts indicate that the current crisis also casts shadows on the market, as Russian oligarchs are making use of these assets as well to subvert sanctions, which is drawing the attention of the US and not exactly in a positive way. During the last few hours, reports surfaced that Democratic representatives in the US Senate are pressing the Treasury Department for information about this potential evasion of sanctions and what can be done if Russia is shown to be taking refuge in cryptocurrencies.

Specifically, they sent a letter to Treasury Secretary Janet Yellen to inquire about the department's "progress in monitoring and enforcing sanctions compliance by the cryptocurrency industry" before expressing concerns "that criminals, rogue states, and other actors may use digital assets and alternative payment platforms as a new means to conceal cross-border transactions for nefarious purposes."

These reports come at a time when Bitcoin trading with rubles and hryvnas are at record highs and sow concern among investors as "if the US starts to see that the Russians are using Bitcoin as a means to avoid sanctions, it is highly likely that they could push for coordinated action to ban the digital currency," warned Naeem Aslam, head of analytics at AvaTrade.

"Banning Bitcoin under such a scenario will bring much higher volatility to the price. It may shake the entire financial market because many companies have massive balance sheet exposure to this asset. However, it is certainly something for traders to watch out for," the expert added.

From a technical analysis point of view, "it is still too early to start to throw caution to the wind, but there is no doubt that the sensations are getting better with each passing day," stated José María Rodríguez, technical analyst at Bolsamanía. "However, until it jumps clearly above $46,000, nothing has happened here," he added.

On Wednesday, the rally slowed down a bit above $45,000. A high formed near $45,349 and the price is now correcting gains as the price pulled back below $44,000 in recent hours. Price also tested the 23.6% fibonacci retracement level of the upward move from the low of $37,030 to the high of $45,349.

The first key resistance is near the $45,000 level. A clear move above this price could point to a further rise to $45,500 and test the $46,500 resistance zone. The next major resistance for the 'bulls' could be near the $47,200 level.

The whales will have a lot to say on the price action, experts comment, as the rebound in market strong hand activity curbed last week's sell-off at $35,000. According to data from blockchain analytics platform Santiment, "whales are increasingly active in conducting massive transactions. During the past three days, there have been 13,400 Bitcoin transactions exceeding $1 million in value."