The World Takes a Dark Turn, Markets React to Ukrainian Tragedy

Before diving into this week’s Market Insights, we want to take a moment and recognize that what’s unfolding in Ukraine is nothing short of appalling. As we were putting this week’s report together, we contemplated whether it was even appropriate to discuss this week’s market action out of respect for those who are forced to go through this nightmare.

The tragedy that’s unfolded over the last 48 hours is front and center, and isn’t a situation any of us take lightly. Real people are experiencing serious hardship and bloodshed, which transcends anything we could possibly publish during times like this. After some debate, we decided to go ahead and stick to our weekly publishing schedule for those who are interested in sifting through some of our thoughts on the state of the market.

For those looking to contribute to the ongoing efforts to help those in need in Ukraine, see the official Ukraine twitter page here. Some additional charities include Save The Children, which has been operating in Ukraine since 2014 (found here), or the International Medical Corps as they prepare to provide essential emergency and primary health services in Ukraine (found here). A more exhaustive list of charities can be found in this thread published by The Giving Block.

Volatility Isn’t Going Anywhere

Sticking with last week’s theme, February continues to be a volatile month for bitcoin and the wider range of crypto assets, with prices making large moves to both the upside and downside. Equity market volatility fueled by rising geopolitical tensions and the tragedy unfolding in Ukraine threw the market into a bit of a tailspin, with a slight relief rally over the last 12-24 hours.

• As soon as the news broke of Russia’s invasion of Ukraine, we saw a broad selloff in Asia equities with the HSI, STI, NI225, and KOSPI all falling between 2-4% on the headlines. sold off on the news; Russian equity indices were down nearly 50% at one point. U.S. equities opened lower, but snapped back to finish the day yesterday in the black. The intraday move on the Nasdaq 100 was one of the largest we’ve seen since November 2008.

• As mentioned in our “Delphi Daily”, leveraged market participants were caught in off guard in the sell-off, causing more than $450M of liquidations in less than 24 hours as BTC hit its intraweek low just above $34K. Nearly 75% of liquidations were long positions, with the remaining belonging to shorts.

Two weeks ago, we made it clear BTC was heading into resistance on multiple timeframes as it approached $45K. These cautionary stances have proven to be prudent in the wake of escalating conflicts and this week’s market volatility.

• Given what has happened in the last 48 hours, it makes sense to revisit our high level, weekly charts to assess any damage or changes done to the market structure. As noted in last week’s