Market tensions rise in level, with the risk of a Russia-Ukraine conflict which holds the bench among investors, and to recover the scene is the safe haven asset par excellence. Gold rose above the $ 1,900 wall yesterday, hitting an eight-month high to coincide with the massive sell-off of Wall Street and other risk assets. Among these, bitcoin was also paying duty, which fell by 7% in the wake of growing geopolitical tensions. Today, the largest cryptocurrency in the world continues to suffer and has seen its prices drop under $ 40,000 for the first time in two weeks. A low in the area of $ 39,700 has been reached. The Ethereum is also bad, traveling in the $ 2,800 area, down by 6% in the last 24 hours (Coin Desk data).
Yesterday’s sharp drop coincided with the worst day of 2022 for the Dow Jones Index with the correlation with the equity markets in marked increase compared to 2021. Bitcoin’s 30-day correlation with the Nasdaq Composite reached 0.73 earlier this month, nearly equaling its five-year high of 0.74 in 2020.
The cryptocurrency therefore tends to move more and more hand in hand with growth-sensitive assets such as stocks and no longer serve as a hedge against inflation or as a safe haven as had been indicated by its supporters in the recent past.
Analysts fear that bearish pressures on bitcoin will intensify if geopolitical tensions escalate further. “Bitcoin is a risk asset and an invasion of Ukraine would keep the pressure on selling cryptocurrencies by another 10-15% in the short term,” said Edward Moya, an analyst at Oanda.
Technical analysis on gold: the ambitious target of $ 2,000 in the sights
After months of trading ranges between $ 1750 and $ 1830 an ounce, gold, with the rise of over 3% this week, managed to move back above $ 1800 / ounce, currently being close to 1900. $ / ounce. The yellow metal was helped in its climb by the weakness in the markets of the last few weeks, caused by the increasingly critical situation in Ukraine. In fact, gold being the safe haven asset par excellence, it is normally appreciated in the phases of stalemate and geo-political indecision and what has been happening in the last few weeks is confirmation of this. The volumes and volatility of the last week are at their highs for 3 months and in the last 20 days an upward trend in prices is identifiable. In the wake of the latest increases, gold could start a large bullish movement with an ambitious target in the $ 2000 / ounce area, but first it will be essential to overcome the current resistances in the 1910-1950 $ / ounce area with volumes. On the contrary, in the event of a rapid resolution of the Ukrainian situation, it is likely that gold will return to the level of $ 1830, the main static support of the raw material.