Bitcoin fell more than 6% early Tuesday as a result of the Iranian missile attack on Israel, which intensified. Tensions in the Middle East. Once the cryptocurrency market opened up, Bitcoin dropped to its current level, just under $61,000.
Bitcoin It actually fell from around $62,200 earlier in the day, which contributed significantly to a phenomenon: volatility that sparked dissatisfaction around the world. Fearing what this war might bring, investors rushed away from riskier assets like Bitcoin and looked for traditional safe havens in gold.
How does the market respond to political unrest?
Military conflict wasn’t the only thing that happened during the missile strikes; It also shook the financial markets. As tensions escalated, the US government revealed that President Joe Biden had ordered military aid to Israel.
Investors are now more concerned about the effects of this intervention on global security and the potential for the situation to worsen. With news feeds filled with stories of missile launches, The value of Bitcoin has fallen About $3,800 in a few hours. It briefly fell to around $60,200, but slowly rose later in the day to around $61,500.
BTCUSD trading at $61,217 on the daily chart: TradingView.com
A bearish October, also called “October” for its historical gains in the past, was what traders had hoped for, but the chaos shattered that dream. Heavy liquidations on huge cryptocurrencies made the sell-off even worse.
Positions in Bitcoin and Ethereum alone lost more than $481 million. In the past, geopolitical situations have caused a sharp decline in cryptocurrency values, which shows how sensitive Bitcoin is to events occurring around the world.
Gold is unfazed, and cryptocurrencies are taking the hit
Oddly enough, as well Bitcoin was losing Gold prices rose 1.2% to near record highs as investors fearing uncertainty sought safety. In fact, this is not a new pattern that we have seen before. People have seen this pattern in tensions between Russia and Ukraine and rising tensions between the United States and China.
Traditionally, Bitcoin has rallied well after initial declines due to global turmoil. But there are still traders who want to hedge the price and are quick to reduce their investments, causing the price to fall.
The way things are going now makes many people wonder where Bitcoin and other cryptocurrencies will go in the future. Analysts believe that Bitcoin could test the $60,000 support – or lower – if things get worse.
Featured image from The Times of Israel, chart from TradingView
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