New Sanctions Against Russia Boost Cryptocurrencies' Positive Outlook

• In an afternoon press conference, President Joe Biden announced that the U.S. will impose another round of sanctions on Russia, restricting its ability to conduct transactions in dollars, euros, pounds, and yen.
• In the morning, bitcoin experienced an 8% decline, reaching its lowest point in a month.

On Thursday, cryptocurrencies experienced a rise, reversing earlier losses, as traders seemed to disregard the Russia-Ukraine crisis.

According to Coin Metrics, Bitcoin climbed 1.7% higher to $38,262.21, while Ethereum gained about 0.2% to trade around $2,631.50.

Bitcoin dropped more than 8% early in the day, reaching its lowest level in a month and falling below a key support level, according to Katie Stockton from Fairlead Strategies. She predicted that the down move could end by the day's end and be followed by two or more weeks of stabilization.

In an afternoon press conference, President Biden announced that the U.S. will impose new sanctions on Russia, restricting its ability to conduct transactions in dollars, euros, pounds, and yen, in an attempt to economically isolate Moscow on a global scale.

As institutional interest grows and more short-term investors treat bitcoin as a risk equity, cryptocurrency price movements have become increasingly linked to those of other risk assets, such as stocks.

Bitcoin's fall of nearly 50% since it hit a record high of nearly $69,000 in early November has put cryptocurrencies under pressure.

The geopolitical situation will likely worsen the commodities market's already high prices and intensify supply chain problems, potentially leading to higher inflation. As a result, the Fed and other central banks may be unable to reverse their hawkish stance, causing risk assets and cryptocurrencies to further decline into bear market territory, according to Anto Paroian, chief operating officer at ARK36.

According to Vijay Ayyar, vice president of corporate development and international at Luno, bitcoin may experience lows near $30,000, with the key level being the low of between $28,000 and $29,000 seen last July.

If bitcoin can maintain its current price, it may reach new highs this year, according to Ayyar. However, if the price drops below that level, bitcoin could potentially fall to the $20,000 mark.

—CNBC’s Ryan Browne contributed reporting.