Crypto Market Shakes Off Russian Invasion Fears

Key Takeaways

• The crypto market has rallied following the possible withdrawal of Russian troops from the Ukrainian border.
• The Layer 1 coins Ethereum, Solana, and Avalanche, have outpaced Bitcoin during the recent rebound.
• While market movements project an easing of tensions between Russia and Ukraine, the Ukrainian government remains skeptical.

The crypto market rallied over the past 24 hours, as news reports indicated a Russian invasion of Ukraine looked less likely. Layer 1 coins led the recovery, with Solana and Avalanche putting in double-digit gains.

Russian Invasion Fears Subside

The crypto market has bounced back.

Cryptocurrencies were staging a broad recovery after reports that Russia was removing troops from the Ukraine border. Although Ukrainian officials remained skeptical of a full Russian withdrawal, the crypto market rallied on the news, sending the total crypto market cap back above $2 trillion.

Bitcoin climbed 5.41% after holding support at around $42,000 over the weekend. The top cryptocurrency was trading at $44,420 at time of writing, and was closing in on its local high of $45,815 set last Thursday.

The Layer 1 coins—Ethereum, Solana, and Avalanche—outpaced Bitcoin during the recent rebound. Avalanche was leading the charge, gaining 13.3% after recouping from a lower low of $76.60 registered yesterday. Solana was also showing strength, climbing 10% and putting the coin back above $100. Ethereum rose 9.1% on the day and was trading at $3,112.

While it is still too early to completely dismiss a Russian invasion of Ukraine, Tuesday morning reports pointed to possible Russian de-escalation on the Ukrainian border. The Russian defense ministry stated that it will withdraw some of its troops stationed on the border while releasing a video of Russian tanks and other heavy weaponry being loaded onto railway cars.

The Russian ruble climbed against the dollar on the news, indicating that investors believed the defense ministry’s announcement to be the start of de-escalation efforts between Russia and Ukraine. The recent gains posted by crypto assets appeared to mirror this sentiment, as the diminished threat of war leads investors back to risk-on assets.

However, despite market movements projecting an easing of tensions between Russia and Ukraine, NATO officials and the Ukrainian government remained skeptical. Ukrainian foreign minister Dmytro Kuleba said that he was still waiting for evidence that Russian troops were actually being withdrawn from the Ukrainian border.

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