Bitcoin Activity Soars After SWIFT Ban On Russia, BTC In Crucial Spot?
Bitcoin has found temporary support at $39,000, but buyers were scarce as the market started weekend price action. Uncertainty surrounding macro factors appears to be mounting as the conflict between Russia and Ukraine adds to the selling pressure experience of BTC and larger cryptocurrencies in recent days.
Related literature | Market Update: Crypto Market Recovers As Tech Firms Boycott Russia
At the time of writing, Bitcoin is trading at $39,168 with a loss of 4.2% in the last 24 hours.
BTC is moving sideways on the 4-hour chart. Source: BTCUSD trading summary
The benchmark crypto saw some relief ahead of the current downside action. Bitcoin activity boomed as a result of the Russian invasion of Ukraine, according to a report by research firm Delphi Digital.
The United States, Europe and the international community have decided to ban the Russian Federation from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the communication rails used by banks in the old financial system. In effect, making Russia a financial outsider.
As can be seen below, on March 1, when the sanctions were announced, Bitcoin’s active supply saw its biggest increase since May 2020. At that time, the start of the lockdown measures to prevent the spread of COVID-19 led the global markets in a serious downward trend .
This rise in Bitcoin’s active supply could indicate that buyers have increased their holdings to hedge against future events. At the same time, as reported by Brian Armstrong and other CEOs of crypto exchanges, BTC and other cryptocurrencies have been used by people on the ground to safely transport wealth across borders.
Additional data from Delphi Digital appears to support this claim, as the BTC supply of addresses with balances between 0.001 and 10 BTC was above 2.73 million. the research bureau added the following:
Cutting off the Russian ruble from the global financial system led to a sell-off, pushing it down 20% over the weekend. As Russians try to preserve value, BTC has emerged as one of the options. This caused BTC to trade at an eye-watering 40% premium.
Source: Delphi Digital
Bitcoin the moment you make or break it?
As NewsBTC reported yesterday, Bitcoin had to stay above $40,000 to avoid further declines. Now that critical support has been lost, a potential $36,000 re-visit seems likely.
Data from Material Indicators appears to support this claim, at least for shorter time frames, as there appears to be low liquidity at current levels at that price. As can be seen from the chart below, there are about $18 million in bid orders for BTC at $36,000.
Until then, all levels seem weak, for the short term. On the upside, the order book seems equally thin, but without buying pressure, it seems unlikely for the time being that the price of BTC will exert upward pressure.
BTC price (blue line) with a thin buy side to $36k (bid orders below the price in red and yellow). Source: Material Indicators
Related literature | Billionaire Investor Says Crypto Outlook Is ‘Very Bullish’ For Bitcoin
According to a pseudonymous analyst, BTC’s price benefited from the “safe haven asset story,” but that momentum appears to have died down. Talking about the potential opportunity to buy BTC’s dip to future lows, potentially allowing the assets to regain previous highs, the analyst said said†
(…) we need a nudge above $46K to continue the bullish trend, which also won’t be easy after such a decline (…). As for the direction of $BTC, I’m a bit confused about what’s next. Until we lose the current level I still have some hope for a turnaround, but the bulls should really come through after the weekend. As for the weekend, I usually expect to chop as usual.