Bitcoin and leading altcoins fell significantly on Tuesday amid news of Russia's recognition of the independence of the Donetsk and Luhansk People's Republics, as well as the introduction of troops into the occupied territories. At a certain moment, BTC dropped to $36,300 for the first time since the beginning of February.
At the start of Tuesday's session, Bitcoin slumped to $36,370 per coin, the lowest level in two weeks. Towards the end of trading, the main digital asset reported a drop of 3% overnight to $37,495.
Popular altcoins adopted the trend of the first cryptocurrency and began to decline spectacularly. In the past 24 hours, Ethereum has fallen by 8.5%, XRP lost 13.8% and Binance Coin dropped by 9.2%. According to CoinGecko, a popular online platform that captures the price of virtual assets, the total capitalization of the cryptocurrency market has fallen by 7.6% to $1.7 trillion in the past 24 hours.
Notably, at the end of last week, the cryptocurrency fell to $38,000, and a few days later it declined to $36,372. However, bitcoin managed to rise above the $40,000 level during the last seven days, but the cryptocurrency was hampered by the difficult political situation in the world.
Experts cite escalating geopolitical tensions in Eastern Europe as the main reason for this week's decline in the global digital asset market.
The unstable global political situation has led to an increased correlation between Bitcoin and the S&P 500. Researchers observe that the 90-day correlation indicator between BTC and the key Wall Street index has reached its highest level since the autumn of 2020.
By the way, Bitcoin's correlation with gold, in contrast, turned out to be negative, as the metal acted as a low-risk instrument amid geopolitical tensions.
Meanwhile, Crypto Market Fear and Greed Index is hovering near the 20-point mark, confirming the prevalence of panic among crypto investors.
The unpredictable activity of the digital asset market is causing experts to make the most unexpected forecasts about its future. Thus, last week, Ethereum creator Vitalik Buterin announced that crypto winter is coming. The programmer is confident that the virtual asset market has already moved into a strong downtrend.
Meanwhile, analysts at Glassnode outlined the risks of a further decline in the value of Bitcoin amid expectations of an increase in the Fed's base rate and geopolitical tensions in Eastern Europe. The Fed's monetary tightening decisions will have a more tangible impact on the cryptocurrency market in the short term, while the conflict between Ukraine and Russia will only have a short-term effect, experts say.
However, analysts at Glassnode noted that if Bitcoin were to give up support at $36,500, it could fall to $34,000. The experts called the $28,000 to $30,000 support range even more important, which represents the bottom of the bear market in the summer of last year.
