Bang Bang Goes Bitcoin (by Pierre)

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There’s really no way to predict what Bitcoin (BTC) or any type of cryptocurrency will do in the wake of recent global events. From geopolitical tensions, rising inflation rates, and tightening monetary policies constantly leaving investors, traders, and major banks with a feeling of anxiety.

So far, we’ve seen a good deal of ups and downs hit the crypto market throughout 2022, and February was no different – marking a turbulent slump.

At the start of February, most of the market was trying to recover from the 17% fall experienced as we welcomed in the new year. By now Bitcoin was already trading well below the $40,000 threshold for around four weeks already, with analysts and Wall Street keeping a stark eye as the digital master currency was trading below 20% on a 200-day moving average.

slopechart BTC

There’s of course a handful of reasons for the sinking prices and hawkish trading. For starters, the feds looking to hike interest rates scared off most of the crypto bulls, and investors were not too eager to jump in on the rally.

The other is that during the same time the S&P managed to scrape close towards correction territory, as the tech-heavy Nasdaq composite was falling by the double digits until the close on January 27th.

Throw in a cluster of slow trading sessions, bad political agendas, and lower consumer spending, and investors quickly started turning their back on the market rally.

By the start of the new month, things were looking a bit better, and some were a bit more hopeful that the current situation will be short-lived, with the Nasdaq climbing more than 1,000 points throughout three trading sessions, with Alphabet announcing its 20-to-1 split.

Throughout the rest of the month, Bitcoin was seeing heavy ups and downs, and investors were starting to feel a bit uncertain about the high volatility of the market.

The ongoing tension between Ukraine and Russia was one of the last pitfalls the cryptocurrency needed in February, falling below $35,000 the week Russia started its invasion into Ukraine. By the end of the week, as tensions were escalating between the Russian government and Western powers, the crypto managed to climb back up to $38,000.

This isn’t the best it’s been throughout February, when the coin managed to climb to $45,000 on February 10th during early morning trading sessions.

As February finally came to a close, the coin suddenly jumped, with the market cap increasing by 17%, on February 28th, closing at $44,411, this was Bitcoins biggest daily gain in twelve months.

AMid the fears of the crypto seeing its value being slashed, investors and traders were soon to jump the gun and kickstart an early rally for the token in March.

So far, experts have all given the green light that there’s a high chance the crypto might be able to break the $50,000 threshold in March.

So what’s been causing the sudden jump in price?

As demand increases for digital currency and assets, not just by investors or traders, but by stranded Ukrainians calling for global assistance through digital currencies, Bitcoin suddenly managed to gain momentum as a sort of widespread ‘digital philanthropy’ kicked off.

With more and more people looking to back the Ukrainian government, and its citizens, with sanctions piling up against Russia, Bitcoin is suddenly proving its worth as a borderless monetary system.

It’s not just digital aid that’s propelling more interest and support for Bitcoin and other digital currencies. In Russia, as banks start to see the devastating effects caused by the war, ATMs run dry, individuals’ savings being used for government expenses, with its banking systems losing their relationship with SWIFT – perhaps Bitcoin will be able to shake off the hawkish performance seen in early 2022.

It’s not highly likely that we will see the crypto reach the same momentum of November 2021 when the token reached its highest of $68,000. There’s still too much volatility currently operating in the market which can cause a sudden downturn.

Investors and traders are hoping to see that the bullish return of Bitcoin will be able to run throughout March peaking at $50,000 either mid or end of the month.

With volumes going up, perhaps it’ll be a reminder that volatility can go down. As an increasing institutional adoption is quickly sweeping across the world, not just in nations that are in dire need of a digital solution, we might be in for a winning streak this month.