- Cryptocurrencies slid Tuesday but were pulling back from a sharper fall as Russia-Ukraine tensions escalated.
- Market leaders bitcoin and ethereum traded near two-week lows, while altcoins suffered deeper losses.
- Russian President Vladimir Putin has ordered troops into two separatist regions in eastern Ukraine.
Bitcoin and cryptocurrencies across the board were trading lower Tuesday, but recovering ground from a sharper sell-off earlier as tensions over a potential Russia-Ukraine conflict escalated.
Leading cryptocurrency bitcoin was down 1.9% over the past 24 hours at $37,649, after falling 4.7% earlier in the morning. Ether, the native token of the ethereum network, was 3.4% lower at $2,589, coming back from a drop of 6.4%.
The crypto market leaders were trading at their lowest levels in more than two weeks. Ethereum has tumbled 16.44% over the past seven days, while bitcoin has lost 14.98% in that time.
President Vladimir Putin ordered Russian troops to enter eastern Ukraine on Monday. The order came in a decree formally recognizing the rebel-held regions of Luhansk and Donetsk as independent states.
In response, the US, UK and EU said they were preparing to impose sanctions on Russia.
Altcoins were leading the losses on Tuesday. Cardano dropped 8.5% over 24 hours, while solana and avalanche were 8.27% and 9.22% lower, respectively.
Crypto prices have suffered since the beginning of the year as the Federal Reserve prepares a series of interest rate hikes to tackle red-hot inflation. Investors have turned away from risky assets, and this has intensified recently due to the geopolitical tensions over Eastern Europe.
The global crypto market cap stood at $1.7 trillion on Tuesday, down 22% from $2.2 trillion at the beginning of January.
Worries about a military conflict and an international standoff reached a crescendo after Putin's order, but eased as the morning went on and investors digested the news.
Caxton's Michael Brown said the market movement was to be expected and driven largely by the escalation in tensions.
"The entire space is the highest of high-beta (risk-sensitive) assets, so it's not surprising that crypto assets are tumbling amid a broad de-risking sparked by President Putin's recognition/invasion of two contested regions in eastern Ukraine," Brown, Caxton's head of market intelligence, told Insider.
On Monday, there was a glimmer of hope for the Russia-Ukraine situation after President Joe Biden and Putin agreed in principle to hold talks soon. But the latest move by Putin is seen as making a summit less likely.
"It's tough to imagine any kind of significant and sustained rebound in the complex until a peaceful resolution or truce to present tensions is found," Brown said