Barclays’ share price dropped by over 5% on Tuesday as investors weighed the ongoing geopolitical risks in Europe. The stock closed at 173p, its lowest level since July 28 last year. This decline pushed the stock below the key support level of 176p, putting it about 21% below its highest point this year, officially entering bear market territory.

Barclays, along with other London banks, has been in a downward trend over the past few days. On Tuesday, Lloyds’ share price fell by 5.48%, while HSBC and NatWest both dropped by over 4%. Much of this decline is due to concerns about these banks’ exposure to Russian clients.

There are also growing worries about the stability of the European banking system, especially if major Russian banks like VTB and Alfa-Bank face collapse. Last week, Barclays’ CEO stated that the bank has minimal exposure to Russia, having exited the market years ago, and does not provide services to sanctioned individuals or entities in the country.

Barclays’ share price also suffered as investors feared the crisis could cause key central banks to slow down on planned interest rate hikes. However, I believe this market reaction to Barclays’ situation may be an overreaction.

The daily chart shows that Barclays’ share price has dropped significantly this week, falling below the year-to-date low of 176p. The stock also slipped beneath the 25-day and 50-day moving averages and has formed a small head-and-shoulders pattern, which is typically a bearish signal.

Given these developments, the stock is likely to continue its decline in the near term. If it does, the next key level to watch will be 150p.