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Russian invasion of Ukraine could add 10%-15% selling pressure on crypto, analyst says, as bitcoin falls below $40,000 briefly

MarketWatch logo MarketWatch 2/18/2022 Frances Yue
© ozan kose/Agence France-Presse/Getty Images

Bitcoin briefly fell below $40,000 on Friday, an important psychological level, as investors monitored prospects of a Russian invasion of Ukraine. 

Video: Bitcoin posts longest rally since September, Shiba Inu surges (Yahoo! Finance)

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Bitcoin traded at as low as $39,661 on Friday, down more than 40% from its all-time high in November, according to CoinDesk data. The cryptocurrency is recently trading at around $40,443, down 4% over the past 24 hours.

“Bitcoin is the ultimate risky asset, and a Ukraine invasion would keep crypto selling pressure going another 10-15% over the short-term,” Edward Moya, senior market analyst at Oanda, wrote in a Thursday note. 

U.S. and NATO officials said evidence on the ground showed Russia had increased troop levels near Ukraine’s borders, though Moscow said earlier in the week that some units were pulling back.

U.S. Secretary of State Antony Blinken said Friday that he is “deeply concerned” that Russia isn’t embarked on the path of diplomacy and that Russia appears to be creating false provocations in Ukraine designed to spark a conflict with Ukraine.

Investors are also watching for any signs on how aggressive the Federal Reserve will tighten its monetary policy, as some investors are now pricing in about six interest-rate increases this year, though minutes of the January meeting released Wednesday provided few new details.

“The outlook for bitcoin remains mostly bullish, but if long-term growth prospects start taking a bigger hit from aggressive Fed tightening, institutional investors might scale down their bets,” Moya wrote.

U.S. stocks are mostly trading higher on Friday. The Dow Jones Industrial Average edged up 0.1% Friday morning, after booking its largest drop since November on Thursday. The S&P 500   gained about 0.1% while the tech-heavy Nasdaq Composite  declined about 0.2%


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