Russia has unleashed an attack on Ukraine in an already unstable macro environment. Liquidity was already quickly draining from the market, and this event will only accelerate it.
The markets were trapped in an impossible situation facing inflation, rate hikes, and quantitative tightening. Now they're facing the threat of war, and the bearish sentiment continues to pile up.
The monthly started green and hit overhead resistance around $3,200. It was almost as if the market thought Jerome Powell and the Fed were bluffing with their rate hikes.
However, Ethereum and Bitcoin could never break overhead resistance as liquidity drained from the crypto markets as several altcoins broke support.
Broken support in smaller caps is an omen. Much like equity traders dump Bitcoin or Ethereum first when things go south, crypto traders dump altcoins first in the same situation.
US equity futures are plunging with the news of the Russian invasion of Ukraine. A
However, the Fed rate hike futures are also falling in tandem. In an already delicate market, hiking rates could cause more damage than the fed would want. They were already facing unknown consequences if they hiked rates too much – How will the markets react to rate hikes in the middle of a war?
All eyes are on President Biden's press conference on Thursday afternoon Friday.