Broad rebound for Bitcoin and cryptocurrency prices despite Russia-Ukraine fears
After four sessions of declines, Bitcoin´s price ended with a moderately bullish close on February 14th that triggered a significant rebound in the cryptoasset market. The session lows were near $41,500 and eroded support at $42,000, but buyers came in to sustain the decline of recent days, triggered by fears around geopolitical tensions between Russia and the West because of what looks like an imminent invasion of Ukraine.
All major digital tokens are trading higher on Tuesday, Feb. 15th, led by NFTs and decentralized finance tokens (DeFi). Solanna and Avalanche are up as much as 11% each, to moderate their rises to 8%, while Bitcoin is advancing with gusto and surpassing $44,000 and Ethereum is reconquering $3,000.
The global crypto market capitalization has increased by 5% to reach the $1.95 trillion mark. In addition, total digital asset market volume increased by 16% to $72.23 billion.
"We are not seeing Bitcoin and 'cryptos' being affected as much by the news as other risk assets, which could be seen as a bullish sign," commented Craig Erlam, an analyst at Oanda. The expert pointed out that, however, "it holds resistance around $45,500, but the declines have not been particularly severe and it hasn't even tested $40,000 since it broke back above that 10 days ago." "Things may be looking up for these assets," he concluded.
However, the overheating of the conflict on the Ukrainian border is leaving its mark on cryptoassets with increased volatility. Moreover, numerous experts also pointed out that in the event that economic sanctions are imposed on Russia or the country is blocked from the Swift payment network, as threatened last week, the Russians could see Bitcoin as a decentralized and unblockable alternative.
CAPITAL RETURNS TO ETHEREUM
As for the 'altcoins', Ether -the unit of the Ethereum network-, received a strong boost after trading the last three sessions below $3,000. The second-largest coin by market capitalization drew price action that brought it close to $2,500, however, resistance at $2,800 held off selling and an influx of new buyers boosted the price by as much as 6% during the last 24 hours.
Cryptocurrency institutional fund manager CoinShares released its weekly report noting that Ethereum (ETH) finally broke its 9-week streak of investment capital outflows with inflows totaling $21 million.
This figure represents about 28% of total inflows into cryptocurrency investment products for the week ending February 11th. About $75 million returned to digital asset funds for the period, the report added.
CoinShares noted that Bitcoin (BTC)-based investment products had a slightly larger inflow with $25 million, but what was noteworthy with Ethereum was the two-month trend reversal.
Total inflows over the past four weeks were $209 million, but this is only a fraction of the amount of capital that entered institutional cryptoasset funds in Q4 2021. The recent market rally seems to have spurred professional investors, who tend to enter and exit markets a bit later than their retail brethren.