Bitcoin, Ethereum, Dogecoin Plunge As Ukraine Jitters Keep Investors On Edge — Will The Risk Appetite Return Soon?

Bitcoin BTC/USD, Ethereum ETH/USD and Dogecoin DOGE/USD took a knock on Thursday evening, with the global cryptocurrency market cap sliding 4.3% to $1.9 trillion, hurt by intensifying war in Ukraine and a firmer dollar. 

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See Also: How To Buy Bitcoin (BTC)

What Happened: Russia's invasion of Ukraine gained further momentum on Thursday. Europe’s largest nuclear power plant, the Zaporizhzhia nuclear power, is on fire after an attack by Russian troops, according to a local mayor.

Adding more pressure, the greenback found support from upbeat weekly U.S. jobless claims data as well as Federal Reserve Chairman Jerome Powell's signal for a rate hike this month. The dollar index rose 0.4% to 97.767, as per another Reuters report.

“Bitcoin needs risk appetite to be healthy for prices to make a run above the $50,000 level, so it should come as no surprise if prices consolidate around the $40,000 level,” said Edward Moya, a senior market analyst with OANDA.

Marcus Sotiriou, an analyst with U.K.-based digital asset broker GlobalBlock, said on-chain data indicates Bitcoin’s accumulation phase has begun. He said an accumulation phase precedes bull markets, while a distribution phase comes before bear markets. 

“Analysis from CryptoQuant shows how the market cap for 6-month-old Bitcoin was 13% at the cycle top, whereas it is now 52%. A larger proportion of investors becoming long-term holders is beneficial for price appreciation,” Sotiriou said in a note. 

Amsterdam-based cryptocurrency analyst Michaël van de Poppe tweeted that Bitcoin was at “the first level of support” at $42,439.50. He said he’s “expecting a reaction here.”

#Bitcoin at the first level of support. Expecting a reaction here. pic.twitter.com/wEPK8HjF84

— Michaël van de Poppe (@CryptoMichNL) March 3, 2022

Ethereum, the second-largest coin by market cap, has seen its supply rise to exchanges since the Russia-Ukraine conflict began, according to a note by Santiment.
The financial market data and content platform questioned whether people sending ETH to exchanges could be the same ones that were “buying the dip.”

Ethereum Supply On Exchanges — Courtesy Santiment Via Sanbase

“This behavior changed as we entered Feb [and] daily news of possible war between Russia and Ukraine intensified. Folks were just sending ETH to exchanges to exit as much as possible, which reflected on the price action,” Santiment said. 

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