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Why Crypto Markets Rebounded After Biden Announced Sanctions on Russia?

By:
Vladimir Zernov
Updated: Feb 25, 2022, 09:37 GMT+00:00

Bitcoin made an attempt to settle above the $40,000 level but lost momentum and pulled back towards $38,000.

Bitcoin

In this article:

Key Insights

  • Cryptocurrencies rebound as the sanctions package brings certainty to markets
  • Gold begins to move higher, indicating that demand for safe-haven assets remains strong
  • Traders should expect strong volatility in the upcoming days as the market will react to any news from Ukraine

Bitcoin rebounded from lows near $34,000 and even made an attempt to settle back above the $40,000 level after U.S. President Joe Biden revealed harsh sanctions on Russia. Is the crisis over for the crypto markets?

Markets Hate Uncertainty

Markets always have a hard time dealing with uncertainty. In most cases, anything that leads to more certainty could serve as a bullish catalyst.

As Biden revealed sanctions on Russia, traders could assess their impact on global markets. While the war in Ukraine continued, S&P 500 was able to gain as much as 1.50% during yesterday’s trading session.

Cryptocurrencies also enjoyed a strong rebound as traders increased purchases of riskier assets. The rebound was broad-based, so all leading coins like ETH, BNB, XRP, ADA, SOL were moving higher.

Also, some traders were willing to bet that the sanctions on Russia’s financial institutions will increase the usage of cryptocurrencies, which looks like a plausible scenario.

Not surprisingly, the Russian financial authorities have stopped discussing crypto regulations in recent days as they are busy elsewhere. Still, the chances of any serious ban on crypto in Russia have declined.

It’s Too Early To Tell Whether the Storm Has Passed

Gold has recently managed to get above the $1900 level and made an attempt to settle above the resistance at $1915, highlighting the growing demand for safe-haven assets.

This is not surprising as the war continues, and multiple scenarios are still possible. In this environment, crypto markets will likely remain extremely volatile, and traders should be ready for fast moves.

At this point, it looks that crypto markets have already avoided the worst-case scenario, but significant risks remain.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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