Weekly Bitpanda Pro market recap #50

Highlights of the week:

• Cryptocurrencies tumbled after dramatic events in Ukraine

• Altcoins lost and regained ground

• Crypto Fear & Greed Index marking fear

Cryptocurrencies tumbled after dramatic events in Ukraine

Tensions rose significantly in Eastern Europe on Thursday when the dramatic events in Ukraine started to unfold. Both the crypto and the traditional markets plunged on that day: BTC dropped to €30,000, its lowest value since January, and the total crypto market cap briefly fell below €1.4T before it managed to get back to over €1.5T. All major altcoins followed suit, suffering losses in double-digit percentages. But not only the crypto market saw substantial dips, as the political situation also had an immediate adverse effect on most other financial markets: the stock market plummeted as well, with liquidations skyrocketing. 

Earlier this month, Bitcoin saw a very positive price movement, touching €40,000 on February 10. However, this eventually came to an end as new developments unfolded in Ukraine. On Thursday, Bitcoin still traded above its January low, which represents an important support zone. Further outcomes of the situation are considered to be the driving force of the market and any negative developments in the near future will likely drive prices deeper into the red.

On Friday, BTC recovered some of the losses along with many major altcoins. The biggest crypto posted gains of almost 9%, with some altcoins outperforming BTC with double-digit increases. 

Altcoins lost and regained ground

Altcoins followed Bitcoin’s direction. Ethereum fell below its trendline resistance and dipped together with the overall market. On Thursday, the price touched €2,100, the support level from January, but bounced back to €2,300 on Friday morning.

After a strong rally in the first week of February, XRP has entered into a consolidation phase, forming a large channel. The price failed to stay above its support and has dropped below the €0.6 level, then rose again over the same level today. Indicators turned bearish, similar to other major altcoins. 

ADA’s price maintained a downtrend for most of the past seven days. Cardano had dropped further on Thursday and regained some strength by Friday. Indicators are still bearish and ADA is trading at its lowest price this year. The price is down around 75% from its all-time high and is now hovering around €0.7, at a level last seen in February 2021.

AAVE bulls are struggling to reverse the price downtrend since reaching a top in the middle of May last year. AAVE's all-time high in May 2021 saw the crypto almost reaching €600, but it is currently back at around €110.

One of the largest lending protocols in the crypto sphere, the Aave protocol has €10B in total value locked (TVL) and a market capitalisation of €1.5B.

Crypto Fear & Greed Index is marking fear

In the wake of the developing situation in Ukraine, the crypto market declined significantly, in parallel with the wider financial markets. Funds have been pouring in what are historically considered “safe havens” - gold hit €1,800 per ounce on Thursday. The market sentiment worsened and the Crypto Fear & Greed Index is now pointing at fear. The index value dropped from 52/100 to 27/100 in the span of a week, reaching 23/100 on Thursday, which marks extreme fear.

The Russia-Ukraine war is causing increasing uncertainty and fear in the global markets. Risk-on assets, equities, as well as cryptos appeared to not be tolerating the situation well. In the past, the Crypto Fear & Greed Index indicating extreme fear at 25/100 meant that it was a better buying - rather than selling - opportunity. However, with the external factors involved, this time it could be different.

Have you been following the price developments of Bitcoin or the smaller caps’ formations and want to act on the market moves on the go? Make sure you trade using our Bitpanda Pro iOS and Android apps. For a comfortable trading experience from your computer, you can also rely on the traditional Bitpanda Pro crypto exchange.

Disclaimer

This content is for informational purposes only and is not to be taken as financial advice. We highly recommend taking the time to do the necessary research before making any investment. Be aware that past performance is no indication of future results.