• Bitcoin dropped and is trading around $40000.
• Ukraine – Russia crisis, weigh on market sentiment, pressuring the riskier asset- Bitcoin.
• Lifchitz suggest “looks like a distraction from the real rates/inflation issue.”

Bitcoin descended and is trading around $40000 during Friday Asian Trading session. The worsening situation in Ukraine is the major catalyst in prompting investors towards safe haven asset and pullback from perceived riskier asset – Bitcoin.

Russian media reported Thursday that the Ukrainian military forces fired mortars and grenades in four Luhansk People’s Republic (LPR) localities. The LPR is located in the Donbas region, a territory internationally recognized to be a part of Ukraine but run by Russian backed separatists. Ukraine, however, denied shelling separatists’ territory, suggesting that this could be the false flag that Russia is trying to put out to set a pretext for an imminent invasion. That said, the Organization for Security and Co-operation (OSCE) in Europe has recorded multiple shelling incidents along the line of contact in the East Ukraine in the early hours of Thursday.

Whereas, Russian Ministry of Defense said that around 10 military convoys have left Crimea and released a video showing a logistics unit coming back to its home base after the completion of drills. Adding to this, the latest update from US satellite image company, Maxar Technologies, showed that Russia has pulled back from the Ukraine border. At the same time, the images showed a lot of Russian equipment is still deployed close to Ukraine and that some new equipment has also arrived recently. However, The developments did little to ease market fears about an imminent Russian invasion of Ukraine. Meanwhile, President Biden reiterated that the threat of a Ukraine invasion by Russia was “very high.” Thus weighs on the risk sentiment.

David Lifchitz, managing partner and chief investment officer at ExoAlpha, noted that “the situation is definitely weighing on risk assets, up like Feb. 15, down like today.” Meanwhile he also said that Ukraine-Russia saga is currently dominating news headlines and causing widespread weakness across global markets, Lifchitz suggested that the situation “looks like a distraction from the real rates/inflation issue.”

BTC/USD 4 Hour Chart:

Support: 39122.9 (S1), 37558.7 (S2), 35027.5 (S3).

Resistance: 43218.3 (R1), 45749.5 (R2), 47313.7 (R3).

The Ukraine – Russia saga takes a center stage as the market’s mover and weighs on Bitcoin. We expect a bearish trend for BTC/USD.