FX.co ★ Crypto market stabilizes as Russia-Ukraine peace talks make progress

The cryptocurrency market and Bitcoin have been in the initial stage of a bull market for two weeks now. Most digital assets are moving upwards thanks to the development of the legal framework and the monetary policy tightening. In practice, however, cryptocurrencies and Bitcoin are mostly influenced by geopolitical and economic factors.

In most cases, there is no direct correlation between Bitcoin's price movements and geopolitical events. Thus, yesterday's negotiations between Russia and Ukraine gave hope for an improvement. The main stock indices reacted with growth, indicating that investors were optimistic about the news. At the same time, the market cap of crypto assets remained unchanged. Based on this fact, we can make some predictions about the future of BTC and altcoins.

Since digital assets correlate strongly with Bitcoin, we will focus on the number one cryptocurrency. First of all, it became clear yesterday that the correlation between Bitcoin and high-risk assets like the NASDAQ and SPX is getting weaker. At least, this is how investors are acting. BTC showed no reaction to the progress of peace talks. This suggests that at the current stage, investors see Bitcoin as an asset to save funds rather than yield profits.

It is important to mention the investment prospects for the digital currency. Amid the possibility that the military conflict may soon come to an end, investors will perceive all important news as a positive shift. At the same time, the crypto market saw a record inflow of investments in the past three months. Now, this trend may lose its appeal as other investment options will reopen. Big players are returning to high-risk assets like stocks. Fundamentally, this will not affect investment flows in the cryptocurrency market, but given the drop in liquidity, the volume of injections will decrease.

However, this is a good signal for Bitcoin, as most experts do not see any signs of the de-escalation of the conflict. With this in mind, the new profile of the cryptocurrency will not allow it to go volatile and fall sharply in price. Bitcoin is currently consolidating near the key resistance level of $48.2k. Over the past two days, the asset has tested this line twice but failed to overcome it. The volume of long positions decreased, just like the activity of institutional investors.

Therefore, BTC is trying to settle in the $48k area in order to continue its upward movement. Technical indicators also confirm the upcoming consolidation phase and accumulation of volumes. The RSI and the Stochastics Oscillator have a clear sideways dynamic. At the same time, MACD continues to rise, confirming the strength of the bullish trend in the medium term. Therefore, we should expect another round of growth. BTC may fail to break through a strong obstacle at $48.2k on the third attempt. In this case, the price will most likely fall to the local support level of $45.2k. Then, the asset will definitely resume its upward movement and head for $48k.