Bitcoin fell below $39,000 in the short term. Analysts said that it would take 2-3 months of stability to achieve a "sustainable recovery"

The local Ukrainian government confirmed on Friday that Russian troops had occupied the Zaporizhzhia nuclear power plant in southeastern Ukraine, and the head of Ukrainian nuclear power operator Energoatom said that although the nuclear reactor was safe, further attacks could lead to a "disaster." The news triggered investors' concerns about the further deterioration of the Russian-Ukrainian war, and the market sell-off intensified. Bitcoin continued its decline the previous day and hastily fell below $40,000. Bitpush terminal data showed that as of press time, BTC changed hands around $38,850, a 24-hour drop of nearly 9%. Analysts predict that with the $40,000 support level punctured, the crypto market needs to see a 2-3 month period of stability to "achieve a more sustainable recovery."

Bitcoin briefly decoupled from stock movements at the beginning of this week, but in the past few months, the overall trend has remained relatively correlated with growth stocks. The Nasdaq index closed down 1.92% on Friday, and the S&P 500 fell 0.81%. European stock markets were even worse, with the German DAX index falling 4.4%, the French CAC 40 index falling 5%, and the Italian Stock Exchange falling more than 6%. Traditional safe-haven assets such as oil, gold and the US dollar rose.

Investors are also watching to see whether the United States and its allies will impose any new sanctions on Russia. Yuya Hasegawa, an analyst at cryptocurrency exchange Bitbank, commented on Friday: "We should pay close attention to whether the Russian ruble can stop falling amid the intensification of financial sanctions against Russia, as another decline could push up the price of Bitcoin as it did on Monday."

The direction of US monetary policy is entangled with geopolitical factors, and macro uncertainty factors have further increased. David Duong, head of institutional research at Coinbase, wrote: "The crypto market needs to see a period of stability in the next two or three months before a more sustainable recovery can begin."

Duong said: "Before the Russian invasion, we thought the recovery could come faster, but we think investors now need more clarity on the timing of peak inflation and the Fed's rate hike cycle before they may be willing to deploy more funds here... Sanctions on the Russian Central Bank have drained about $300 billion of reserve liquidity from the global system, which has the potential to hurt risk assets in the coming weeks."

Bitpush previously reported that Federal Reserve Chairman Powell said at a hearing in the middle of the week that the Fed expects to raise the benchmark interest rate by 25 percentage points after the March 15-16 meeting.

As of press time, Bitcoin’s market capitalization has shrunk to $740.3 billion, and the trading price has fallen nearly 45% from its all-time peak in November. With the Federal Reserve meeting approaching in mid-March and the conflict in Ukraine intensifying, the market is likely to remain highly volatile.