Will the conflict between Israel and Iran cause Bitcoin to fall further? Analyst speaks

Bitcoin prices plummeted to $60,164 on Tuesday following heightened geopolitical tensions in the Middle East due to Iran’s missile attack on Israel. This escalation has disrupted global markets and affected both traditional and crypto assets. Bitcoin was also unaffected with a notable drop of -4%.

Market participants who had expected a strong bullish trend this month, dubbed the “Uptober,” were forced to reassess as broader market sentiment turned risk-off. But analysts say the reaction to geopolitical news may be overblown.

Will Bitcoin fall further?

Macro strategist Alex Kruger (@krugermacro) warns about sudden shifts in market sentiment. Via X, he I will write“It was weird to see everyone go completely wild and scream ‘Uptober’. From doom to darkness, in a heartbeat. […] Despite the conflict in the Middle East, this is an election year in the United States. There is great uncertainty ahead. ”

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Highlighting the volatility typically seen in financial markets during US election years, Krueger said, “In election years, October is correspondingly the most volatile month, with stocks historically experiencing a slightly negative “It shows a return.” He added that speculative markets tend to react to uncertainty, and given the upcoming election and Friday’s jobs report, expect more volatility.

“Of course, if the jobs report is very strong this Friday, stocks will collapse because we are in a ‘good news is good news’ regime, but the time to keep pushing is after the election. It will probably start on election night,” Krueger said.

Renowned cryptocurrency analyst CRG (@MacroCRG) memo Bitcoin price likely to recover despite temporary market turmoil. “This could be the lowest in a quarter for boys. The market likes to make highs/lows early in the candlestick. Moreover, geopolitical movements are more likely to weather There is still some turmoil to be expected depending on Israel’s response, but the market is probably expecting this.”

Similar to Krueger, he outlined that increased market liquidity could provide support for Bitcoin, saying, “Liquidity will start to increase from now on. Bitcoin will sense that very quickly. We should,” he said. Overall, CRG remains bullish on Bitcoin’s long-term trajectory, claiming that despite short-term uncertainty, “$100,000 BTC is coming.”

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Singapore-based trading firm QCP Capital also provided its view on the impact of the dispute. In recent investors Notethe company writes: “The conflict between Israel and Iran has escalated, with Iran firing more than 180 missiles. Nevertheless, the reaction in traditional financial markets has been relatively muted. The S&P closed just 1% lower. However, crude oil (WTI) rose 2%.

However, the cryptocurrency market saw a sharp decline, and Bitcoin faced stronger selling pressure. “Bitcoin closed 4% lower, with support holding near the $60,000 level. If the conflict escalates further, BTC could reach the $55,000 level,” QCP said. Point out.

QCP Capital’s report also highlights that despite the immediate impact, the broader economic environment remains favorable for risk assets in the medium term. “Geopolitics in the Middle East will be in the spotlight for the time being, but the shallow decline suggests the market remains strong in bidding for risk assets. We must not let this small setback distract from the bigger picture. No.”

They also point out that global monetary policy is also an important factor. “Liquidity outflows and potential fiscal support from the People’s Bank are likely to support asset prices in China, and bullish sentiment could spill over globally to support risk assets, including cryptocurrencies. There is. […] We expect asset prices to remain supported into 2025 as the world’s largest central bank (Fed) and third largest central bank (People’s Bank of China) begin their interest rate cutting cycles in earnest.” QCP concluded.

At the time of writing, BTC was trading at $61,286.

Featured image created with DALL.E, chart on TradingView.com