Bitcoin plunges, but $33,000 holds up and 'altcoins' bleed over Ukraine war

The cryptocurrency market was gripped by panic on Thursday and a wave of selling swept Bitcoin and altcoins after Russian President Vladimir Putin took the escalation of the conflict with Ukraine into new territory after launching a large-scale attack on Ukraine. Global markets reacted with sharp falls for risk assets and equally large rises for safe havens, with rises in oil or gold. Stock markets are suffering and electronic currencies, where the shocks usually hit hardest, are bleeding, proving once again that they have lost their hedging role and are behaving like a risky stock. Total capitalization has lost 10% and stands at $1.55 trillion.

Bitcoin gives up 9% to 10% to prices around $35,000, but still sits far from support at $33,000 and January lows at $32,855. "$32,500 looks more like the 'point of no return,'" warned John Kicklighter, chief strategist at DailyFX. The single currency accumulated declines of 20% in the last week and more than a few believe that $30,000 is back in play.

"The crisis between Russia and Ukraine is affecting all risk markets at the moment, not just Bitcoin," commented Nicholas Cawley, strategist at DailyFX. "The constant swings of good news and bad news make it difficult to value and trade the market at the moment," the expert noted, as he believes that until this changes "it is hard to see any reason to trade Bitcoin from the long or short side."

"If the war situation worsens, we could see the price of the digital currency even below $30,000," indicated Ipek Ozkardeskaya, an analyst at Swissquote. "The other cryptocurrencies will also feel the blow of the Ukrainian war. Remember that when Bitcoin sneezes, the whole crypto industry catches a cold. There's also the fact that higher energy prices make cryptocurrency mining more expensive. So that's also a fundamental reason that prevents Bitcoin from being a safe asset in the current environment," he added.

Bitcoin alternative tokens are worse off, as they are experiencing carnage and yielding around 10% on average. Cardano, Avalanche and Dogecoin are doing even worse and are down 15%. Ethereum loses 13% and gives up the support of $2,500 to face the next control zone, at $2,200. However, experts believe that it is still exposed to further falls before it stabilizes, as it accumulates losses of 25% during the last seven days.

According to the charts, weekly support is around $2,000, but there is a strong possibility that it will give way below this price level, according to technical analysts, down to $1,850. However, experts do not believe it will break below $1,800 in the short term. In general, they indicate that any drop below these levels is a buying opportunity.