Ukraine Joins Russia in Legalizing Bitcoin

Russia, Ukraine and Bitcoin Analysis:

• Ukraine passed an ammended crypto law weeks after Russia
• Russia-Ukraine tensions heat up amid skirmish – BTC drops to support
• Key (BTC) technical levels analyzed

Ukraine Legalizes and Regulates Cryptocurrencies

Yesterday, the Ukrainian parliament enacted an ammendment to its existing legislation regulating cryptocurrencies. Prior to the law, cryptocurrency transactions operated within a legal grey area. The timing of the legislation appears rather interesting considering Russia voted to regulate and tax cryptocurrency earlier this year, however, it must be note that the bill was set in motion all the way back in 2020.

Cryptocurrency Dips as Geopolitical Escalations Heat Up

Bitcoin approached 45,000 but sold off on Thursday after news of a flare up in eastern Ukraine hit news wires. Bitcoin, like many risk assets, remains highly reactive to the news flows out of Ukraine and remains one of the most speculative ‘assets’.

Typically, Bitcoin has performed well when the stock market (S&P 500) was booming. Now, as global monetary policy normalizes and equities fail to show any signs of reaching new highs, bitcoin looks to be following suit.

Bitcoin 4-Hour chart

Source: IG, prepared by Richard Snow

Yesterday’s drop settled at the 40k mark and trades slightly up at the time of writing. Should the sell-off continue, the nearest level of resistance appears at 39,600 before 37,325. Bullish momentum faces many challenges including the latest developments in Ukraine and the zone of resistance between 41,500 and 42,500. A break above the zone brings 40k and 45,650 into focus as levels of resistance.

Bitcoin Daily Chart

Source: IG, prepared by Richard Snow

— Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnowFX