Bitcoin (BTC) is down about 30% after peaking at 5.8 million rubles per token on March 9. Nevertheless, the said drop could provide an excuse for traders to dump another large supply of Russian national currencies if a classic bullish continuation pattern plays out.
Bitcoin is heading towards 11 million rubles
The pattern, also called the “ascending triangle”, appears when the price consolidates between a rising lower trendline (support) and a flat upper trendline (resistance). It will complete after the price breaks out of the consolidation range in the direction of the previous trend, observing the levels at a length equal to the maximum distance between the top and bottom trendlines of the triangle.
The price of BTC against the ruble has been trending in a similar structure since January 2021, as shown in the chart below. It closed above the triangle’s top trendline and rose more than 20% to its all-time high of 5.88 million rubles.
Nevertheless, BTC corrected to test the range’s resistance as support, a common sight after breakouts as traders seek confirmation of the pattern with more upside.
If this is the case, the chances of a recovery to 11 million rubles in the future seem high, an increase of almost 140%.
Russian capital controls
The technically optimistic outlook for the BTC/RUB market also comes amid an ongoing exodus of Russian assets since Russia’s invasion of Ukraine, as western countries have worked together to damage the country’s ties to the global banking system.
As a result, the Moscow Exchange has suspended trading from February 28 until further notice. Similarly, shares of Russian-backed companies abroad have suffered, with an MSCI index tracking their exchange-traded funds reporting an outflow of nearly 78% since the invasion began on Feb. 24.
Related: Ally or Suspect? The war in Ukraine as a stress test for the crypto industry
As of March 7, the ruble had fallen by more than 50% year-to-date against the US dollar, the biggest drop since 1998 when Russia defaulted on its debt. The Russian central bank intervened through a series of capital control measures, including a six-month ban on the sale of foreign currencies.
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