Bitcoin suffers setback on Ukraine tensions and battles with price at $42,000

Bitcoin´s price has been falling for four consecutive sessions amid rising tensions on the Ukrainian border, with several countries evacuating their population due to the heating up of the conflict between Russia and the US. Washington warned that the Kremlin could invade Ukraine as early as this week and the drums of war are sounding louder and louder, prompting a widespread flight from risk assets, including cryptocurrencies.

The world's largest cryptocurrency left a pullback over the weekend that placed it in a narrow range between $43,000 and $42,000, with closes just above the latter price level. Saturday and Sunday's lows remained just below $42,000, which is acting as a very short-term support ahead of the $40,000 major control zone.

As for the rest of the digital tokens, the 'altcoins' are dyed in red in general and the total market capitalization is $1.86 trillion, so it largely separates itself from the $2 trillion reached just a few days ago. Ethereum is among the assets suffering the biggest declines and is looking for support at $2,800. The second currency by market capitalization is far from the $3,200 it surpassed, in closing prices, in several sessions last week and even lost $3,000. It has lost 7% during the last seven days.

The investor flight took off last Friday, a day of significant declines on Wall Street, when Bitcoin plunged along with all other risk assets following reports that the U.S. believes Russia was planning to invade Ukraine as early as this week. "This is a small setback in the rebound in the cryptocurrency market and should confirm the consolidation pattern that was forming," noted Edward Moya, an analyst at Oanda.

"Bitcoin is widely regarded as a valuable store of value and medium of exchange, but geopolitical issues have tested its other core values of being a viable, decentralized, tamper-proof and non-confiscatable monetary system," explained Nigel Green, CEO of deVere Group. "These real-life use cases will further increase Bitcoin's mass adoption and drive prices higher this year."

Despite the recent drop in Bitcoin prices, investment in the blockchain space continues to rise, with nearly $1.19 billion injected into the digital sector last week alone. Notable investments include Binance, which invested $200 million in Forbes, and Polygon's $450 million token sale. "The surge in interest in cryptocurrencies is because digital currencies are backed by strong fundamentals, with institutional interest increasing rapidly," commented Naeem Aslam, head of analytics at AvaTrade.