Bitcoin could crash Russian ruble

The bullish outlook appears as the Russian central bank tightens capital controls on its citizens, including a prohibition on using rubles to purchase US dollars. Bitcoin (BTC) has dropped by around 30% since reaching a high of 5.8 million rubles per token on March 9. Nonetheless, if a classic bullish continuation pattern plays out, the drop above could be an excuse for traders to dump another large stash of the Russian national currency.

The pattern is known as an “ascending triangle,” It appears when the price consolidates between a rising lower trendline (support) and a flat upper trendline. It completes when the price breaks out of the consolidation range in the direction of the previous trend, with the price aiming for levels with a length equal to the maximum distance between the triangle’s upper and lower trendlines.

Since January 2021, BTC’s price against the ruble has been trending inside a similar structure, as shown in the chart. It closed above the triangle’s upper trendline, rising more than 20% to an all-time high of 5.88 million rubles.

Nonetheless, BTC corrected to test the range’s resistance as support, which is a common occurrence after breakouts as traders seek confirmation of the pattern with more upside.

If this is the case, the likelihood of a rebound and continued rise to 11 million rubles, a nearly 140 percent increase, appears high in the future.

Russia’s capital controls

The technical bullish outlook for the BTC/RUB market also coincides with an ongoing exodus from Russian assets since Russia’s invasion of Ukraine, as western nations have collaborated to sever the country’s ties to the global banking system.

As a result, trading on the Moscow Exchange has been halted effective February 28 until further notice. Similarly, shares of Russia-backed companies have suffered in the international market. An MSCI index is tracking their exchange-traded funds, reporting a nearly 78 percent outflow since the invasion began on February 24.

March 7, the ruble had fallen by more than 50% year to date against the US dollar since Russia defaulted on its debt in 1998. The Russian central bank intervened with a series of capital control measures, including a six-month ban on foreign currency sales.

The post Bitcoin could crash Russian ruble appeared first on FinanceBrokerage.