Skip to main content

Possible Scenarios For Bitcoin, How The Market Has Reacted To Past Wars

Bitcoin has been moving sideways around its current levels as the war started by Russia with Ukraine rages on. The first crypto by market cap could see more bloody days ahead, as uncertainty about the outcome, sanctions to the Russian government, and their impact across the market increases.

Related Reading | Digital “Ukrainian” for Sale: All Funds Will Be Spent on the Needs of the Army

At the time of writing, Bitcoin was trading at $38,284 with 0.7% profit in the past 24-hours. However, it quickly managed to get above previous resistance and trades at $40,561 with a 7.66% profit on the daily chart.

BTC bouncing back on the daily chart. Source: BTCUSD Tradingview

In a recent report published by QCP Capital, the firm claims the Luna year of the Tiger has been marked by important negative events which took their toll on global markets. These include the Chernobyl Disasters, the Cuban Missile Crisis, the Korean War, and now the Russian invasion of Ukraine.

Due to the international sanctions on Russia, its equity, bonds, and currency have been heavily affected. This reaction, QCP Capital said, could contribute with a rapid de-escalation of the conflict.

Thus, buying the Bitcoin dip as it stumbles back into previous lows could be a profitable option for investors. QCP Capital reviewed the market reaction to previous conflicts in an attempt to assess a potential future reaction from the market. The report claims:

Historically, war-related sell-offs have been great buying opportunities, particularly large-scale war involving superpower. In the Vietnam war (1964) Gulf War (1991), Afghan War (2001), Iraq War (2003) and Crimean Crisis (2014), markets saw positive returns for 3-6 months after the invasion.

The firm believes the current situation has been following the pattern as Bitcoin and other assets seem to be bouncing back. This situation could sustain itself, at least for the short term, but QCP Capital recommends cautions as there are many potential global headwinds.

Source: The Crypto Circular by QCP Capital

Daniele Casamassima, CEO at Pure Fintech told NewsBTC the following on the current situation:

This uncertainty in the crypto market is further hindered by the fact that there is now a close correlation between financial markets and global crypto markets.

Break Or Bounce, Why Bitcoin Could Follow Old War Patterns

A similar situation occurred in 2001 with the U.S. invasion of Afghanistan, the report said. At that time, the market bounce back for 3 months, and then returned to a downtrend that broke previous lows.

Source: The Crypto Circular by QCP Capital

For Bitcoin, this scenario could lead it to revisit the low $30,000 or break below to last year’s low around $28,880. One key different with previous conflicts, as QCP Capital noted, is the imminent hike in interest rates from the U.S. Federal Reserve.

In 2021, interest rates were at 6.1% and today they seem to only trend to the upside which could negatively impact global markets. Others believe the opposite, if the conflict extends, the FED and other central banks could used it as an excuse to delay any shift in monetary policy.

Related Reading | TA: Why Bitcoin Must Close Above $40K For Trend Reversal

Casamassima added the following on a potential bullish thesis for Bitcoin:

The digital currencies, although badly affected at the moment, in the long run could become the only feasible option for those people that are the most affected by new economic sanctions. Therefore the bear market could turn into a bull market.



from NewsBTC https://ift.tt/LZzmP0q
via IFTTT
Labels:

Comments

Post a Comment

Any questions, Please.

Popular posts from this blog

ENS DAO delegates offer perspective on DAO governance and decentralized identity

AlphaWallet CEO and Spruce co-founder talk about their roles as contributors to the Ethereum Name Service following the project's recent airdrop. Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community.  Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers. Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for  resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. Alpha...
Post a Comment
Read more

How Social Platform Chingari is Using Web 3.0 to Transform the Traditional Way We Use Social Media

The world is changing. This isn’t news to anyone, but sometimes it is nice to realize that—contrary to news headlines—not all the change is bad.  In fact, the last decade has seen so much innovation and so many improvements to technology that even 2015 seems like a different world.  Internet speeds, connecting with anyone globally (for free), and our ability to reach large groups of people without a middleman is nothing short of revolutionary. When it comes to technology evolution, this often happens with different iterations.  Once a system is mature, there’s a better idea of what we would like to change and improve.  We go back to the drawing board, target our creative minds at the issues, and create a new version that has evolved to better meet our needs.  The Internet has followed this model since its inception, evolving through three distinct stages.  We are only at the cusp of the third stage, called Web 3.0, with technologies such as blockchain and ...
Post a Comment
Read more

INX submits bid for Voyager Digital's assets

FTX US won a $1.4-billion bid to purchase Voyager’s assets in September, but with the firm filing for bankruptcy, the funds were once again up for grabs. Trading platform INX has submitted a bid for an undisclosed amount to purchase the assets of crypto brokerage firm Voyager Digital. In a Nov. 30 announcement, INX said it had sent a non-binding letter of intent for Voyager’s assets following the platform filing for bankruptcy in July. According to INX CEO Shy Datika, the bid was aimed at providing “credibility, technology, and unique regulatory positioning” for Voyager users seeking stability in a volatile market. Voyager’s original bankruptcy filing from the Southern District Court of New York suggested the firm could owe between $1 billion to $10 billion to more than 100,000 creditors amid a bear market and exposure to Three Arrows Capital. In September, FTX US won a $1.4-billion bid to purchase Voyager’s assets, but with FTX Group itself filing for bankruptcy in November, th...
Post a Comment
Read more