Bitcoin Shows Surprising Resilience Amid Russia Aggression-Provoked Selloff

Fredrik Vold
Last updated: | 6 min read
Kramatorsk, Ukraine. Source: A video screenshot, Youtube/The Telegraph


Although the price of nearly all risk assets, including bitcoin (BTC) and other major cryptassets tumbled on Thursday as Russia launched a full-scale invasion of Ukraine, some are surprised as BTC performed better than expected and even recovered some of its losses.

For now, BTC appears to have found firm support above the USD 34,000 level, having gained more than 5% from its low of just over USD 34,300 earlier in the day.

At 17:00 UTC on Thursday, BTC stood at USD 36,055, down 7% for the past 24 hours and 8% for the week. At the same time, ethereum (ETH) traded at USD 2,467, down 9% for the day and 21% for the week.

BTC price past 30 days:

Source: CoinGecko

And while cryptoassets suffered, commodities such as oil, natural gas and gold all soared higher in price today.

As of this writing, brent oil traded at just over USD 103, moving above the important USD 100 level earlier in the day for the first time since 2014 in what marks a significant shift in the price of oil.

Meanwhile, natural gas also traded up significantly today, with UK-listed natural gas futures rising 11.7% for the day. The rising prices for natural gas came after both Germany and the US stated that approval of the much-discussed Nord Stream 2 gas pipeline from Russia to Germany now has been put on hold.

Lastly, the traditional safe-haven gold also rose sharply as reports emerged that Russia had launched a full-scale attack on Ukraine. At its peak earlier today, the price of gold touched USD 1,974, its highest since September 2020. As of press time, however, the gold price had retraced to around USD 1,922 and was up 0.73% for the day.

“Definite breakout on gold,” technical analyst and founder of trading group The Birb Nest, CryptoBirb (Adrian Zduńczyk) said as the yellow metal surged higher. He followed up by saying that BTC is following stocks, although he noted that several large capitalization stocks “are showing more weakness than Bitcoin.”

What caused bitcoin to drop?

Explaining the drop in the price of bitcoin following the invasion, Anto Paroian, Chief Operating Officer at digital asset investment fund ARK36, said that the situation for now is a typical ‘risk-off’ scenario, where all assets that are seen as being high-risk falls.

“Now that the war between Russia and Ukraine has become reality, investors are rushing to take risk off the table and stock markets globally are seeing major declines,” Paroian said. He added that with the close correlation that exists between stocks and bitcoin, “it doesn’t come as a surprise” that crypto markets are also falling.

Further, Paroian warned that the war will not necessarily lead central banks to become less aggressive with their monetary tightening, as a war will inevitably make existing supply chain issues worse, resulting in even higher prices on important commodities.

“This means that the [US Federal Reserve, Fed] and other central banks may really have no room to reverse their hawkish course and we can expect risk assets and cryptocurrencies to go deeper into the bear market territory,” Paroian said.

Also commenting on the market moves today, the popular economist and crypto trader Alex Krüger, said that “fundamental investors” may be rewarded later, although bitcoin is currently being sold.

“Crypto has been going down as both algorithmic and discretionary traders are treating bitcoin as a risk-on asset highly correlated with stock indices. Fundamental investors who are bullish bitcoin as an alternative currency may get their day once panic subsides,” Krüger said.

Bitcoin falling less than expected

Meanwhile, according to some, bitcoin has fallen less than expected on the dramatic news out of Ukraine.

“I honestly think it’s doing pretty ok,” Ruud Feltkamp, CEO of crypto trading bot Cryptohopper, said in comments shared with

He added that “a slight move down” was expected anyway, and explained that the “run-up” to major crises throughout history has tended to have a bigger impact than the event itself.

The same sentiment was also shared by the independent crypto analyst and former Messari Crypto researcher Mira Christianto, who shared an overview of how stocks have performed during earlier wars.

Other members of the crypto community on Twitter also shared the view that BTC has so far performed better than expected through the crisis.

Similarly, Jim Bianco, president of the investment analysis firm Bianco Research, also remained bullish. He shared a comment from European Central Bank Governing Council member Robert Holzmann, saying the ongoing conflict could delay an exit from the central bank’s stimulus program.

The double-edged sword of sanctions

Possibly, some of resilience that bitcoin has exhibited may be explained by speculations that BTC might have a role to play on both sides of the conflict.

Among the most impactful of the sanctions that are now being discussed is to cut Russian banks off from the SWIFT international payments system, as has been called for by Ukraine’s Foreign Minister.

However, as reported, while some agree that a SWIFT block could well be the most logical course of action for Western allies, it’s not likely to materialize.

If Russia will in fact be cut off from SWIFT, the country could potentially turn to bitcoin and crypto as a tool to evade Western sanctions. And although this certainly constitutes adoption of bitcoin by a major player, it is not necessarily good for the crypto space, some argue.

“This could be very negative for the general perception of cryptocurrency as it would give Western governments more legitimacy to crack down on digital assets,” Jonas Luethy, a sales trader at the digital asset broker GlobalBlock, said in a comment today.

The scenario was also highlighted by Ryan Selkis, founder of Messari, who urged his followers to move their coins off exchanges.

USD 28k ‘solid support’ for BTC

Commenting on the relevant technical levels for bitcoin as the price drops, one popular crypto trader on Twitter identified the USD 28,000 level as “solid support” for the past year.

He added that it would be reasonable for this level to hold again, but noted that “smart market participants” are likely to front run the level, meaning buying can be expected even before the coin falls to that level.

“I think we need a [washout] on big volume in BTC to purge the last of the laser eyes. I am thinking sub [USD] 27,000 then I will take a look. We could bounce from [USD] 30,000 first, we will see,” the veteran trader and technical analyst Peter Brandt told, adding that the longest-term narrative for BTC is still valid.

However, he stressed that what happened in Canada “was short-term worrisome because it showed that owners of BTC cannot do whatever they want to do with their cryptos. Governments can disrupt the market.”
Learn more: 
Bitcoin, the Ukraine Crisis and the Central Bankers Dilemma
Here’s What the Cryptoverse Has to Say About Russian Invasion of Ukraine

With War Starting and Markets Dropping, Questions Multiply About Central Banks’ Policies
Regional Interest in Bitcoin Sees an Uptick as Russia Invades Ukraine