The crypto market bounced up on Wednesday, slightly offsetting the dip brought by the escalating geopolitical situation in the world. That time, Bitcoin fell 12% to nearly $36,600, a level previously seen in mid-2021. ADA also dropped by 16%, while Ethereum declined by 14%. This widespread sell-off pulled the market cap of cryptocurrencies down from $2 trillion to $1.7 trillion.

Another reason why crypto dropped is the uncertainty around inflation. Interest rate hikes and geopolitical risks will also negatively affect the long-term bullish trend of the crypto market, so for now, it is better to stick to shorter-term bearish expectations and just buy on the dip rather than looking for any signs of a bottom. Most likely, turbulence in the markets will continue, and this is very good for traders - high volatility allows you to seize the moment and buy assets that have fallen in price, with the prospect of their further growth.

On a different note, the governor of the Bank of Spain warned the public about the risks that the economic system could suffer if traditional banks were to merge with crypto assets. Pablo Hernandez de Cos stated that direct or indirect exposure to these assets will increase the risks for financial institutions. He also said that some crypto assets have already become competitors for banks and financial institutions.

Technical analysis for Bitcoin

BTC fell below $38,000 level and is currently trading around $35,690. Active purchases were seen at $36,510, but a lot will depend on $35,690 because a breakdown will lead to a further dip to $32,910 and $29,240. Meanwhile, a rise above $38,140 will prompt a rally to $41,000 and possibly $44,720 and $48,550.

Technical analysis for Ethereum

A lot depends on $2,750 because a breakout will lead to a rise to $2,940 and $3,190. Meanwhile, a decline below the level will result in a deeper fall to $2,490, $2,312 and $2,149.