Bitcoin tanked on Thursday, with crypto markets in a sea of red after Russia declared war on Ukraine and began military operations in the Donbas region.

The world’s largest cryptocurrency slumped 11% overnight to about $34,900- its lowest level in a month. Altcoins including Ethereum, XRP and Solana logged double-digit losses, wiping out nearly $200 billion in crypto market capitalization.

Bitcoin slumps

$35,000 was a key support level for Bitcoin, and its breach today could herald more losses. Speculation was rampant over where the next support level was for the token, and whether a recovery was possible. Twitter user @MatthewHyland_ warns–

If $33k fails then $28.8k would be the last line in the sand

Risk-driven markets across the globe traded sharply lower after Russian President Vladimir Putin said Russia would carry out a “special” military operation in Ukraine, and demanded Kyiv’s surrender, BBC reports. U.S. stocks shed over 1% overnight, while Asian markets dropped sharply in morning trade.

Stablecoins saw the largest overnight volumes in the crypto market, as safe-haven demand soared. Tether one-day volumes surged to more than $50 billion, while Binance USD and USD Coin had nearly $8 billion in combined volumes.

Goal prices surged, as did the Japanese yen and the U.S. dollar.

Reports of explosions in Kyiv rocked sentiment, as investors feared retaliation from western powers. The United States had imposed some sanctions on Russia earlier this week, and had promised tougher moves in response to any escalation by Moscow. But whether this will lead to military intervention remains to be seen.

Only one safe haven?

Traders took to twitter to highlight a major divergence between Bitcoin and gold, with the latter surging to more than 2%. Bitcoin’s recent downward trend has dismissed earlier speculation that the token would be a gold alternative, or even a safe haven.

Journalist @DavidInglesTV tweeted.

Bitcoin faces yet another test on Friday, ahead of a closely-watched U.S. inflation figure that could open the door for sharper interest rate hikes this year.

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