Sanctions give Bitcoin confidence

Immediately after the Bank of Russia asset freeze due to hostilities in Ukraine, bitcoin trading volumes increased sharply on Monday, February 28, and the coin itself jumped in price by almost 17% (from $37,840 to $44,220). The number of bitcoin addresses with balances over 1,000 BTC increased by more than 6% to 2,226. The indicator had not reached this level since March 2021. The number of addresses with a balance of 100 to 1000 BTC also increased on February 28, although not as noticeably. The indicator increased by 1.3%, to 15,929 over the day. This is evidenced by the data of the Glassnode service. 

Some analysts suggest that such a rapid increase in the number of bitcoin whales is due to the attempts of the Russian elites to withdraw their assets to circumvent the sanctions and convert the depreciating rubles into cryptocurrency. 

According to Bloomberg, the National Security Council of the White House and the US Treasury Department appealed to the operators of the world’s largest centralized exchanges with a request to stop any attempts to circumvent the sanctions imposed on Russia. The White House spokesman said that cryptocurrencies are not a replacement for the US dollar, which is widely used in the Russian Federation. However, the US authorities intend to combat their misuse. European Central Bank President Christine Lagarde also called for increased regulation of digital assets in the euro area. 

At least four cryptocurrency exchanges, including Coinbase and Gemini, have said they will take steps to tighten controls. 

According to well-known economist and analyst Alex Kruger, if Russia uses cryptocurrencies to circumvent sanctions, this will be enough for US regulators to ban digital assets altogether. “Don’t expect this to happen. But be careful in your actions,” he warned, adding that if the geopolitical situation does not worsen, investors will soon see the growth of the crypto market. 

The dynamics of the cryptocurrencies’ movement between private and exchange wallets indicates the lack of certainty among investors regarding the further developments in the digital asset market. This is written by CoinDesk with reference to the report of Bank of America (BofA). 

According to analysts, the tightening of the Fed’s policy and macroeconomic factors will limit the growth of cryptocurrencies in the next six months. However, BofA emphasized that this will not be the beginning of a new “crypto winter”, as the level of adoption of digital assets by users and the activity of developers has increased significantly. 

The bank also added that it will be difficult for the digital asset market to move out of the current price range until fears of a possible recession are discarded. 

After the jump on February 28, the upward movement of the BTC/USD pair slowed down on March 01-02, when approaching the strong $45,000 resistance zone. And then, after an unsuccessful attempt to break further up, it turned back to the south. (Recall that this resistance had already sent the pair down several times in January-February). 

If the flagship currency still manages to rise above $45,700 at some point, we can expect its further growth to $47,000-50,000 due to the triggering of a large number of buy orders. 

Legendary trader Henrik Zeberg, author of The Zeberg Report and expert on macroeconomic cycles, presented three charts to show that major stocks and cryptocurrencies are poised to rise in Elliot Wave 5. According to Zeberg, the most important stock market indices S&P500 and Nasdaq are approaching bullish reversals on the weekly charts. If his prediction comes true, bitcoin could once again increase its correlation with stocks and indices. 

At the time of writing, the BTC/USD pair is trading around $39,300, the total market capitalization, after rising to $1.963 trillion, returned to the values of a week ago at $1.755 trillion, and the Crypto Fear & Greed Index grew by only 6 points (from 27 to 33 points), having firmly stuck in the zone of Fear. 

Bloomberg Intelligence Chief Strategist Mike McGlone reiterated that bitcoin is well on its way to becoming an international reserve asset. He assured that the BTC rate will reach $100,000 in 2022. The analyst also emphasized that the price of the flagship digital currency will not drop to $30,000 despite the bearish sentiment in the market. 

McGlone also believes that such coins as Dogecoin must lose their influence in order for bitcoin to finally establish itself as a reliable tool for protecting money savings. 

An AI robot advisor created by Portuguese software developer Tiago Vasconcelos has supported Bloomberg Intelligence’s chief strategist’s point of view. The coder “trained the bot, explained the rules, candles, principles when you can either buy or sell, or do nothing.” The bot receives one point for each profitable trade and loses it as a “punishment” for unprofitable trades. having talen thousands/millions of steps to increase the balance of the trading account, the robot advisor eventually opted for a “hodling” strategy, that is, accumulating bitcoin. (Recall that Hodl is a popular meme in the bitcoin space that arose from a message on the Bitcointalk forum in 2013 with a misprint in the word “hold”).
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