First Mover Asia: India Commodity Price Increase Stemming From Russia Invasion Could Hurt Crypto Investment; Bitcoin Loses Momentum

Good morning. Here’s what’s happening:

Markets: Bitcoin's price slips after the powerful rally earlier in the week appeared to stall.

Insights: Russia-Ukraine war starts to affect Asian economies in ways that could ripple through the crypto industry.

Technician's take: BTC downside could persist into the Asia trading day.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.

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Prices

Bitcoin (BTC): $43,835 -0.1%

Ether (ETH): $2,944 -0.1%

Biggest Gainers

Asset Ticker Returns Sector Cosmos ATOM +4.5% Smart Contract Platform Solana SOL +3.3% Smart Contract Platform Polygon MATIC +2.2% Smart Contract Platform

Biggest Losers

Asset Ticker Returns Sector Algorand ALGO −3.1% Smart Contract Platform Stellar XLM −1.9% Smart Contract Platform Bitcoin Cash BCH −1.8% Currency

The powerful price rally witnessed in bitcoin earlier this week appeared to stall on Wednesday, as Federal Reserve Chair Jerome Powell reaffirmed the U.S. central bank's plan to raise interest rates this month for the first time since 2018.

"Continued uncertainty about the proposed U.S. Fed rate hikes in March and growing tensions in Eastern Europe plagued the market for most of February, though prices rebounded at the month’s end," the crypto exchange Kraken wrote Wednesday in an emailed report.

Katie Stockton at Fairlead Strategies sees prices potentially headed higher, toward the $50,000.

"Our short-term gauges are pointing higher, but risk is heightened in this environment," Stockton wrote Wednesday in an email.

The sad saga of the war in Eastern Europe seemed likely to worsen in the days ahead, if not beyond, as Russia escalated its rocket attacks on major Ukraine cities, a 40-mile military convoy barreled toward the capital city Kyiv and Ukrainians continued a desperate and increasingly resourceful defense of the country.

Wednesday also saw the United Nations General Assembly vote overwhelmingly to condemn Russia's unprovoked attack, with 141 member countries voting in favor of the resolution and just five, including Russia, voting against it. China, India, Pakistan, Vietnam and India were among 35 countries that abstained.

At the time of publication, bitcoin was roughly flat over the previous 24 hours, just below $44,000. Ether, the second-largest crypto by market cap, was also about where it stood a day ago. Most major cryptos were off slightly.

Markets

S&P 500: 4,386 +1.8%

DJIA: 33,891 +1.7%

Nasdaq: 13,752 +1.6%

Gold: $1,927 -0.9%

Insights

The Russian invasion of Ukraine is still in its early days, but it is already starting to affect Asian economies in ways that will likely ripple through the crypto industry.

Commodity prices rose in India, which is one of the biggest importers of Ukrainian sunflower oil. An increase in commodity prices could eat into Indian investors’ skyrocketing appetite for cryptocurrencies. India remains one of the world’s largest crypto markets in the world thanks to a young populace and rising disposable incomes. Some 20 million Indians signed up for trading accounts in 2021, according to a January Economic Times story. CoinSwitch Kuber, India's largest crypto exchange, saw a 3,500% rise in transaction volumes and reached 14 million users recently.

The country, which relies on Russia for about half its arms and other military equipment, has been cagey in its response to the attack. It was one of just 35 countries on Wednesday to abstain in a U.N. General Assembly vote to condemn the Russian action. (Five countries, including Russia, voted against the resolution.) Last week, a number of officials even suggested they might help Russia bypass sanctions by establishing rupee accounts for executing trade transactions.

China, Pakistan and Vietnam, another large importer of Russian military hardware, also abstained eight years ago in a vote condemning Russia's annexation of Crimea, which some Russia experts have said foreshadowed its Ukraine goals.

Elsewhere, Taiwan's native dollar saw further suppression from traders as markets weighed the possibility of China, emboldened by Russia's attack, ratcheting up its military presence around the island.

In Malaysia, crypto exchange Binance announced a strategic investment in local exchange MX Global, one of the four recognized market operator-digital asset exchanges that received full approval by the Securities Commission Malaysia in July 2021. Malaysia’s crypto market is in its early stages but it is also growing, with local startups like analytics service CoinGecko becoming some of the most-used crypto service providers tools in recent years.

Technician's take

Bitcoin Fades From Resistance; Support at $40K

Bitcoin (BTC) struggled to break above the $44,000 resistance level as overbought conditions appeared on the charts. Momentum is starting to slow, which could point to a deeper pullback into the Asia trading day.

Still, buyers could remain active at lower support levels, particularly at $40,000. At that point, the pullback could stabilize on intraday charts.

On the daily chart, there is stronger resistance at $46,000, which capped the price rally in early February. Buyers will need to make a decisive break above resistance in order to reverse the three-month long downtrend.

Most indicators are neutral, although there has been a loss of downside momentum on the weekly chart, which could be a positive development this month.

Important events

8 a.m. HKT/SGT (12 a.m. UTC): New Zealand ANZ commodity price

8:30 a.m. HKT/SGT (12:30 a.m. UTC): Jibun (Japan) Bank Services purchasing managers index (Feb.)

8:30 a.m. HKT/SGT (12:30 a.m. UTC): Australia building permits (Jan. MoM/YoY)

8:30 a.m. HKT/SGT (12:30 a.m. UTC): Australia trade balance (Jan. MoM)

1 p.m. HKT/SGT (5 a.m. UTC): Japan confidence index (Feb.)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Role of Crypto in Russia-Ukraine Crisis, Bitcoin Price Jumps as Demand in Ukraine and Russia Booms, Gitcoin Founder on Crypto for Public Good

"First Mover" hosts explored whether crypto can find a safe haven role in Russia-Ukraine crisis. Tanvi Ratna, CBDC expert at Policy 4.0 shared her views. Premiums for bitcoin are soaring on exchanges servicing Ukraine and Russia, and Knox Ridley of I/O Fund provided his market analysis. Plus, Gitcoin founder Kevin Owocki explained how crypto can be used for public good.

Headlines

Ukraine Expands Crypto Donations to Accept Dogecoin: The dog-themed meme coin joins bitcoin, ether, USDT, SOL and DOT as cryptocurrencies currently accepted by Ukraine.

Ukraine Says 'Airdrop Confirmed’ After Receiving $33M in Crypto Donations: It’s the first time a country will conduct an “airdrop” for donations.

Top Russian Bank Quits Europe, Citing Sanctions: Report:The European Central Bank had ordered the closure of Sberbank's European unit over Ukraine conflict.

Payments Giant FIS Worldpay Joins Shyft’s Crypto Compliance Network: It’s the second large, non-crypto firm to join Shyft, following law firm DLA Piper last month.

Putin Is Temporarily Banning Foreigners From Pulling Money Out of Russia: The ban will reportedly go into effect on Wednesday.

Ruble-Denominated Bitcoin Volume Surges to 9-Month High: The increase comes as the West's sanctions on Russia trigger a flight from the ruble.

Longer reads

Why Crypto Networks Should Preserve Russian Propaganda: The internet is the information war’s venue. Social giants Twitter and Facebook may delete Russian misinformation, but there’s a strong case that “fake news” should be preserved.

Today's crypto explainer: US Crypto Tax Guide 2022

Other voices: I'm a Cold War Historian. We’re in a Frightening New Era.(The New York Times)

Said and heard

"Putin is more isolated from the world than he has ever been." (U.S. President Joe Biden) ... "The ruble has already lost 30% of its value and Putin himself is to blame." (U.S. President Joe Biden) ... "Remember last month when we explained how Credit Suisse had securitized its yacht and jet loans to oligarchs and tycoons? Turns out the bank didn't like the publicity: It's now asking investors to destroy the documents citing a “data leak to the media” (Financial Times capital markets reporter Robert Smith) ... "Stand with the people of Ukraine. Now accepting cryptocurrency donations. Bitcoin, [e]thereum and USDT." (Twitter account of Ukraine) .... "Grenada's representative to the [World Trade Organization], who told @MuyaoShen in December he was leaving Tron, follows up his earlier complaint about Ukraine (possibly?) not rewarding donors by saying it's his "duty" to protect tron user interests." (CoinDesk Editor Nik De on Twitter) ... “To the extent cryptocurrencies are a means to evade law enforcement and national security that’s not something we should tolerate.” (Federal Reserve Chair Jerome Powell)