Ethereum dropped back below the $3,000 mark while Ripple briefly plunged to the $0.75 level before paring some losses on Friday.

The largest digital asset by market capitalization and its counterparts faced strong downside pressure amid heightened tensions between Russia and Ukraine. Worries about further escalation on the geopolitical front and lingering concerns over a possible Russian invasion of Ukraine pushed cryptocurrencies lower across the board. Of note, digital assets plunged along with stock markets, with Wall Street benchmarks suffering a major sell-off on Thursday before some stabilization in recent trading.

In this context, the upcoming meeting between the US secretary of state Antony Blinken and the Russian foreign minister Sergei Lavrov will be in focus, both in the traditional equity markets and cryptos. Any signs of easing tensions over Ukraine could push bitcoin north in a sigh of relief. However, one shouldn’t expect the major conflict to be resolved anytime soon.

Bitcoin licks wounds, threatens $40,000

Technically, downside risks to the BTCUSD pair are limited as long as the prices stay above the $40,000 handle that had capped the recent sell-off. On the negative side, however, the coin has derailed the 20-DMA in the process and now struggles to stage any meaningful recovery, treading water just above the mentioned support, which implies that cautious buyers are not ready to reenter the game just yet.

In a wider picture, the most popular digital asset remains stuck in a range between the 20- and 100-week SMAs, looking set to finish the week lower for the first time in four weeks. Should the bullish momentum reenter the market anytime soon, the key local target could be expected at $46,000.

However, the coin failed to preserve the upside momentum and came under renewed selling pressure today. The BTCUSD pair retreated to the $43,300 support zone, a break below which would pave the way towards $43,000, followed by the mentioned lows, strengthened now by the ascending 20-DMA. As such, the short-term outlook for BTC stays relatively upbeat as long as the prices hold above this moving average.

Cryptos looks neutral amid directional stocks

The overall picture in the cryptocurrency market looks neutral at this point, while traditional financial markets struggle for direction on Thursday as investors continue to cautiously monitor developments in geopolitics. Sellers remain in control even after Russia had started pulling back its troops from the Ukraine border. Of note, the West warns that there is a growing Russian military presence at the border. As global equity markets stay in cautious mode, digital currencies refrain from decisive fluctuations as well.

In a wider picture, however, the BTCUSD pair keeps recovering gradually from mid-2021 lows seen below the $33,000 figure last month. The prices have been trending north for the fourth week in a row already, and should the bullish bias persist in the short term, the next resistance could be expected at $46,000, followed by the descending 100-DMA, currently at $47,600.

On the downside, the immediate support arrives at $42,000, followed by the mentioned 20-DMA which is a critical hurdle for BTC bears for the time being.

As EURUSD managed to hold above the 1.1400 figure that triggered local recovery, the pair advanced to intraday highs just below the 1.1450 zone during the European hours. Meanwhile, the USD index struggles to regain the upside momentum and was last seen trading around 95.40, down 0.24% on the day. It looks like the greenback could see deeper losses in the immediate term before attracting demand in anticipation of a major economic report. The immediate significant support for the index now arrives at 95.15, followed by the 95.00 figure. However, it looks like this level would withstand the pressure and push the greenback north eventually.

ECB adds to local optimism

The euro was also supported by the latest remarks from European Central Bank's Governing Council Nagel who said that he would advocate normalizing monetary policy if the inflation picture doesn't change by March. The economic costs of acting too late are significantly higher than acting early, he added.

As such, the euro edged slightly higher amid fresh hawkish hints from the central bank. In a broader picture, however, it looks like the common currency will hardly be able to regain the 1.1500 barrier as the divergence between the Fed and the ECB will keep capping gains in the euro while supporting the dollar. The EURUSD pair may get back below the descending 100-DMA in the coming days as the USD will regain the upside bias across the market should the upcoming report show another jump in consumer prices.

In Japan, retail sales, industrial production, consumer confidence, and housing starts data came in lower than expected. In Australia, ASX 200 climbed after the RBA said it ends the bond-buying program, as the central bank said the conditions for rate rises were not yet in place.

Meta Platforms spoils the party

US stocks were also buoyed as the recovery was spurred by dip buyers and mostly positive corporate earnings. On Thursday, however, Wall Street stocks tumbled after a four-day rally after Meta Platforms reported disappointing quarterly results that shook markets and wiped more than $200 billion off its valuation. The company’s shares plunged over 26% as its profit came in lower than expected in the fourth quarter. Furthermore, the Facebook parent revealed gloomy revenue guidance for the current quarter.

Following heavy losses, however, Wall Street indexes managed to bounce ahead of the weekend due to Amazon's positive earnings. The giant reported upbeat earnings in the holiday quarter that pushed the company’s shares more than 13% higher.

On the data front, the employment report showed US nonfarm payrolls increased by 467,000 jobs last month, compared with the 150,000 jobs addition expected. Equities managed to stay afloat after the release despite the strong result raised fears of faster-than-expected rate hikes by the Fed to curb inflation.

As such, all three major stock indexes ended their first week of February higher. Of note, Meta failed to enter a recovery mode and lost another 0.3% on Friday, while other social media companies rebounded strongly on solid quarterly earnings of their own.