Bitcoin, ether and most other cryptocurrencies spent much of Monday in the red as more bad news flowed from Ukraine.
At one point bitcoin was trading at about $39,00, slightly up over the previous 24 hours. Ether was selling at just over $2,550, off slightly over the same period. Other major cryptos in the CoinDesk top 20 by market capitalization also fell, although Terra’s luna and and Axie Infinity (AXS) were among the exceptions. Trading was light as investors seemed inclined to wait out events later in the week, including a decision by the U.S. central bank’s Federal Open Market Committee (FOMC) on the first of what many observers believe will be several interest rate hikes this year to quash raging inflation.
“Cryptos across the board are in for a choppy period as investors await developments with Russia-Ukraine talks and if the Fed gives a clear path for interest rates that could possibly lead to a deeper bond market selloff,” OANDA Americas Senior Market Analyst Edward Moya wrote in an email.
Analysts remain divided about whether crypto and equity markets are correlated assets, but the two have seemed to operate along similar wavelengths in recent weeks. The tech-heavy Nasdaq fell about 2% on Monday and the S&P 500 was off slightly.
Meanwhile, the Economic and Monetary Affairs committee of the European Parliament decided to exclude a proposed rule that could have banned proof-of-work systems such as bitcoin throughout the European Union, but the vote seemed to have little impact on crypto prices.
In Ukraine, Russia escalated its bombardment of the capital Kyiv as the Kremlin remained unmoved by calls from most of the international community to halt its unprovoked attack. Russian forces stopped a convoy of supplies for the besieged Black Sea port of Mariupol, which is facing food and other shortages. Ukrainian and Russian representatives are scheduled to meet again on Tuesday to discuss a ceasefire. Ukraine President Volodymyr Zelensky will address the U.S. Congress remotely in an effort to convince lawmakers to provide more military support.
Moya noted optimistically that cryptos had gotten a boost from Tesla CEO and crypto influencer Elon Musk, who tweeted that although owning quality stocks or a home was good during high inflationary times, he would not be selling bitcoin, ether or doge.
“Musk’s tweet is a reminder that a lot of long-term hodlers are out there and that bitcoin will likely see strong support ahead of the bumpy path that lies ahead as the U.S. Federal Reserve starts raising interest rates,” Moya wrote.