Cryptocurrencies turn positive after Biden introduces new sanctions against Russia

Cryptocurrencies recovered their losses after President Joe Biden said in a press conference that the U.S. will introduce another wave of sanctions against Russia that would limit its ability to do business in dollars, euros, pounds and yen, in an effort to isolate Moscow from the global economy.

Bitcoin climbed 5% higher to $39,509, according to Coin Metrics. Early in the day, the cryptocurrency dropped more than 8% to touch $34,702.18, marking its lowest level in a month and falling below a key support level.

Ether gained about 4% to trade around $2,715.

The earlier drop in cryptocurrency prices comes as global equity markets tumble following Russia's military attack on Ukraine. NBC News reported that explosions were heard in Kyiv, the Ukrainian capital.

Cryptocurrency price moves have increasingly become more highly correlated to movements in other risk assets like stocks.

"The prospect of geopolitical escalation has been the main driver of price moves in the broader risk asset spectrum for the past couple of weeks," said Anto Paroian, Chief Operating Officer at digital asset investment fund ARK36. "Now that the war between Russia and Ukraine has become reality, investors are rushing to take risk off the table and stock markets globally are seeing major declines."

The U.S. and the U.K. have slapped sanctions on Russian banks, individuals and the country's sovereign debt. The European Union will hold an emergency meeting on Thursday and could reportedly unveil further sanctions on Russia.

Cryptocurrencies have been under pressure since bitcoin hit a record high of nearly $69,000 in early November. Since then, bitcoin has fallen nearly 50%.

Ayyar said that bitcoin could see lows at around $30,000 mark with the key level being the low of between $28,000 and $29,000 seen last July.

If bitcoin manages to hold above that, then it could move to new highs later this year, Ayyar said. But he added that if the price falls below that, then bitcoin could move to the low $20,000 mark.

—CNBC's Ryan Browne contributed reporting.