© Reuters. Bitcoin, Ethereum, Dogecoin Rally As Crippling Sanctions On Russia Give Rise To Expectations Of Them Emerging As SWIFT Competition
Bitcoin and other coins rose sharply Monday evening as the global cryptocurrency market cap rose 12.2% to $2 trillion.
Bitcoin (CRYPTO: BTC)
Ethereum (CRYPTO: ETH)
Dogecoin (CRYPTO: DOGE)
Theta Network (THETA)
See Also: How To Buy Bitcoin (BTC)
Why It Matters: Investors will be on the lookout for Federal Reserve Chair Jerome Powell as he makes his appearance before Congress this week for delivering his semiannual Monetary Policy Report testimony.
As Western nations mount sanctions on Russia after it invaded Ukraine last week, the anxiety around aggressive rate-hikes has simmered down, however, the Federal Reserve is expected to push through a quarter-point rate hike at its two-day March policy meeting, reported Reuters.
“We expect Chair Powell to hint strongly in his congressional testimony that the Fed will go 25 basis points, not 50 basis points, at the March 16 meeting,” said Wells Fargo (NYSE:WFC), in a research note seen by Reuters.
Meanwhile, it is the sanctions themselves that may be giving a boost to Bitcoin and other cryptocurrencies.
“Western allies are delivering harsher sanctions and restrictions on Russian banks and that is bolstering the argument for blockchain products that will compete with the SWIFT network,” said Edward Moya, a senior analyst with OANDA, in a note seen by Benzinga.
“Bitcoin and all the top altcoins are rallying today as investors realize the likelihood of massive investments into DeFi following the latest round of Russian sanctions.”
In a tweet, cryptocurrency trader Michaël van de Poppe pointed out the “strong move of [Bitcoin]” and said it “looks like upside is the way for the coming week.”
Even so, those who purchased the apex coin during market highs have capitulated, although the resolve of so-called Hodlers remains intact, according to a weekly update from Glassnode.
The on-chain analytics company said that the primary redistribution of Bitcoin “appears to be coming from investors who bought the $60k+ range around the all-time-high, which has found new owners around the current price range of $35k to $38k.”
Glassnode analyzed the UPRD metric, which follows the distribution of coin supply at the price it last moved on-chain.
While in the May-July period there was a “degree of demand” from buyers willing to purchase at higher prices, the markets were cleared of exuberance when the on-chain activity on the Bitcoin network thinned in the following months leading to a redistribution.
Bitcoin: UPRD in May 2021 — Courtesy Glassnode
Glassnode said that the spending behavior describes a market “dominated by price-insensitive Hodlers, who appear unwilling to liquidate their coins, even if held at a loss.”
Bitcoin UPRD In February 2022 — Courtesy Glassnode
“Top buyers have been significantly flushed out, and represent a far smaller proportion of the investor cohort when compared to May-July 2021.”
Glassnode said they have not witnessed a widespread decapitulation event despite the risk that a “kinetic conflict” — like the one btween Russia and Ukraine — introduces with the exception of very short-term holders who purchased the all-time high or premature dips during the drawdowns. Bitcoin Hodlers “maintain a remarkably bullish conviction.”
Read Next: Bitcoin Volume In Russia Skyrockets As Ruble Falls And Tensions Rise
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Bitcoin, Ethereum, Dogecoin Rally As Crippling Sanctions On Russia Give Rise To Expectations Of Them Emerging As SWIFT Competition