Russia’s invasion of Ukraine has made investors nervous. Bitcoin’s price is moving up regardless. Altcoins haven’t performed that well, but Terra Luna has almost doubled its price. Terra stands out in the DeFi market too with Fantom.
Bitcoin made the biggest daily move since February 2021
Bitcoin’s price is $43.600 at the time of writing this article. We were looking at $37.300 a week ago. This translates to a 17% price increase in seven days. Most of this rise took place on Monday (yesterday). It was a surprising price surge since major stocks indices were flat.
The graph below shows Bitcoin’s price movements with daily candles. It also shows the 50-day (blue) and 200-day (purple) moving averages.
Bitcoin has made a triumphant return above the important 50-day moving average. In fact, the price blasted through this trend line with a big margin. Investors’ confidence has changed massively since the previous week. Back then we were in serious downfall and looking at red candles day after another. Bitcoin’s price is now back on the levels it reached in early February.
As mentioned earlier, most of last week’s price move took place yesterday (2/28). It was an unusually big green candle. In fact, we haven’t seen a daily candle like this in over a year.
#Bitcoin closed its biggest daily candle in 385 days.
The last time we saw such a daily candle close in the green, we saw more price action to the upside. pic.twitter.com/hgKdQZFPsQ
— Crypto Rover (@rovercrc) March 1, 2022
Monday’s price move was 14-15% depending on the exchange.
Many feel that it happened because of the buying pressure coming from Russia. Many Russians exchanged their rubles for bitcoins to escape the massive downfall of the Russian currency. Ruble crashed over 20% against the U.S. dollar on Monday. Trading volume for the Ruble/Bitcoin pair was at the highest level since May 2021.
It is certainly possible that the Russian buying pressure contributed to the price move. We saw also shorts being liquidated for 300 million dollars. This means short-sellers had to buy back the bitcoins, which created more buying pressure. There could be also whale manipulation, large whale purchases, and so on. We never know for sure what causes certain price moves.
The impact of the Russian invasion ended up being insignificant. Bitcoin’s price crashed early Thursday along with the stock market futures. By Thursday evening Bitcoin had already climbed back to the price levels of the Wednesday evening. Stock market indices also recovered all losses.
It is not surprising to see a war causing close to no impact on the stock market. This is also a historical fact. Wars and terror attacks, like 9/11, have historically had a small impact on stocks. In the case of Ukraine, the possible invasion was already priced in several times before it took place.
Even if Bitcoin is moving higher, investors shouldn’t start taking victory laps. The invasion didn’t crash the markets, but the financial sanctions might. We have no idea how many Russian banks could fall and what that would do to the global banking system. Energy prices are also soaring.
On top of all, we are closing the day when the Fed is announcing rate hikes. This will take place in two weeks and will be followed by more tightening every month.
It is also possible that Fed would dial down the tightening due to geopolitical tensions. Hence, there are many ways this war could impact the markets eventually. Not to even mention the threat of a nuclear war.
Terra Luna made a massive move
Let’s look at the altcoin market.
The past week was great for Bitcoin. Its market dominance moved up from 42.6% to 44% on Monday which translates to almost 1.5 percentage points. This is a major move in one day. It also means that altcoins have taken serious hits compared to Bitcoin.
The list below shows all major cryptocurrencies and their performance against Bitcoin (24h / 7d / 30d).
All top 15 currencies have lost to Bitcoin in the past 24 hours and seven days, except two (AVAX & LUNA). Terra Luna is the only well-performed altcoin on the list.
We also mentioned Terra in our news summary. The Luna Foundation Guard, which is steering the project, announced last week a purchase of one billion dollars worth of bitcoins. This will be used as an additional reserve for the UST stablecoin.
The market cap of UST has also grown about billion dollars since the announcement. This means there has been a massive demand for the LUNA token because it is used for minting UST. Those LUNA tokens are also burned out of circulation. You can read more about this process from our Terra Luna guide.
The LUNA token has risen 58% compared to Bitcoin. It is the second-best performer of the top 100 list of cryptocurrencies.
Anchor Protocol is the third-best performer. This is a DeFi application running on the Terra platform. Anchor is used for staking UST tokens for an APY of 19.5%. Anchor got also a nice boost last week when the previously mentioned Terra Luna Guard injected 450 million dollars into the protocol.
The Anchor Yield Reserves have received a $450m top-up and now sits at $507m. https://t.co/wqwPH7pTxE
— Anchor Protocol (@anchor_protocol) February 18, 2022
In practice, this means that Terra is funding partly the 19.5% APY investors get from Anchor. This, in return, will boost the popularity of UST and the price of LUNA. The investment is probably a very profitable one.
Both LUNA and Anchor lost to Waves, which is the native token of the Waves platform. It has surged 70% compared to Bitcoin. There is no obvious reason for Waves to rally this much. It could be because the founder of the project, Sash Ivanov, is Ukrainian.
Terra and Fantom are pulling the DeFi sector
Previously mentioned Terra and Anchor have been top performers in the DeFi sector as well. Terra has been one of the platforms and pulling the DeFi sector higher with Fantom.
The TVL value of the DeFi market has risen from 193.67 billion dollars to 209.11 billion dollars.
This increase in TVL is a total of 15.44 billion dollars. Terra is responsible for 7.87 billion which is more than half.
Let’s look at the protocol rankings. This time we’ve seen some action! Even the top three positions have changed. Lido protocol has climbed to third place and overtaken Convex Finance. Lido is running on Terra, Ethereum, and Solana. Most of the TVL growth is coming from Terra.
Lido was boosted by its integration with Kusama. If you don’t know Kusama, it is a “canary network” of Polkadot. You can read more about Kusama from our Polkadot guide. Lido has become popular due to its liquid staking feature, which makes it possible now to earn more with your KSM tokens too.
This is what liquid staking means. You can first stake your tokens to earn yield like in any other application. After this, you’ll receive stake tokens, for example, stETH for ETH. You can then move these stake tokens to another protocol and earn a yield on them as well.
Previously mentioned Anchor has also overtaken WBTC and moved to sixth place. Anchor’s TVL has grown over 30 percent.
This is the current ranking of the blockchains.
Terra has done amazingly well last week. It has gained almost 8 billion dollars of TVL thanks to Lido and Anchor protocols. Terra’s TVL number is almost twice as high as BNB Chain, which is occupying third place.
Fantom had also a fantastic week. The platform was boosted by the launch of Solidly. It is a new decentralized exchange created by Andre Cronje, the founder of Yeard Finance. Cronje is also one of the developers of Fantom. Solidly has gained over two billion dollars of liquidity in one week.
Solidly offers an extremely lucrative yield that attracts investors. You can learn more about the protocol by watching this video. Multichain has also increased its TVL significantly on Fantom.