Saturday, August 13, 2022

Recent Bitcoin Rally Had Nothing to do With Sanctions on Russia, Here’s Why

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Earlier this week, the Bitcoin (BTC) price rallied all the way to $44,000 levels amid reports that the recent U.S. sanctions on Russia were the reason behind it. However, new data shows that talks of Russians are evading sanctions via crypto don’t seem to be true.

As per data from blockchain analytics firm Chainalysis, the ruble-denominated crypto activity on March 3 stood at $34.1 million. This was 50% down from the $70.1 million activity a week ago on February 24. The ruble-denominated crypto activity stood at a record $158 million in May 2021. Madeleine Kennedy, senior director of communications at Chainalysis said:

“This is a fraction of the volume that was seen during the all-time highs of Russian crypto trading volume reached May 2021″.

Data from Citigroup also shows that the actual Bitcoin buying from Russia just stood at an average of 210 BTC per day. Thus, Russia’s buying power seems to have little impact on the crypto market. Probably, it could be because of renewed whale buying as reported by Coingape. In the Wednesday report, Citi analysts including Alexander Saunders writes:

“Russian volumes have been relatively small so far, suggesting that the price action is more due to investors positioning for an expected uptick in demand from Russia, rather than Russian demand itself. It will take meaningful capital flight to move the needle.”

Bitcoin and Crypto Correct As Russia Escalates War

On Thursday, Russian forces conducted a heaving bombing outside Europe’s largest nuclear plant Zaporizhzhia thereby further escalating its attack on Ukraine. The reaction in the crypto market was quick which is now down 5% over the last 24 hours.

Bitcoin (BTC) is down 5% and is currently trading at $41,323 levels with a market cap of $785 billion. Along with Bitcoin all of the top ten altcoins are also seeing a healthy correction anywhere between 5-10%. Sean Farrell, head of digital-asset strategy at Fundstrat, writes:

“Ongoing geopolitical conflict and macro uncertainty could result in continued volatility. If we see another significant bout of downward pressure on prices, recent precedent gives us some confidence that there will be buyers that step up” in the $33,000 to $35,000 range, he said, referring to Bitcoin.

Disclaimer

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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