According to many, the main cryptocurrency had gained this week thanks to US sanctions against Russia. However, recent data shows that Russians do not use cryptocurrencies to circumvent sanctions.

Blockchain company Chainalysis reported that the value of ruble-denominated crypto activity as of March 3 amounted to $34.1 million. This indicates a 50% decline from $70.1 million in activity seen a week ago on February 24. In May 2021, the amount of ruble-denominated crypto activity reached a record $158 million.

Citigroup data also shows that actual bitcoin purchases from Russia averaged only 210 BTC per day. Against this background, it can be concluded that Russia's purchasing power appears to have little effect on the cryptocurrency market.

Who Actually Buys Bitcoin?

This week's rise in the value of bitcoin can be attributed to the fact that crypto whales resumed purchases.

"Russian volumes have been relatively small so far, suggesting that the price action is more due to investors positioning for an expected uptick in demand from Russia, rather than Russian demand itself," Citigroup analysts note. "It will take meaningful capital flight to move the needle."

Reaction of cryptocurrencies to global threats

On Thursday, the Zaporizhzhia nuclear power plant, the largest in Europe, was seized by Russian forces. Against this background, the first cryptocurrency has dropped in value by over 5% in the last 24 hours as Russia escalates its attack on Ukraine. Other top altcoins have plunged by 5-10%.

"Continued volatility could be a result of ongoing geopolitical strife and macro uncertainty," Fundstrat analysts said. If prices extend losses, "recent precedent gives us some confidence that purchasers will step up" in the range from $33,000 to $35,000, they added.

Local correction or third bottom

As noted in yesterday's review, if the main cryptocurrency fails to overcome the resistance level of 44,329.52, the triple bottom reversal pattern may form a third bottom.

Meanwhile, the asset's downward movement has been limited by the support level of 41,333.53. However, it is difficult to say whether this mark will be able to prevent the digital currency from sliding further or not. If the price breaks through and fixes below this boundary, bitcoin will most likely return to 34,000 - 37,000, the area where bitcoin has already been bought back twice since January by crypto whales.