Only when top cryptocurrencies were getting all set for a traditional October rally did tensions in the Middle East spoiled the mood at the global crypto markets as well as equities and commodity markets. Bitcoin and all major altcoins took the hit as rising tension between Iran and Israel forced investors to cash out in anticipation of major price drops across the globe.
According to international media reports on Wednesday, Iran unleashed a severe attack on Israel by firing over 200 rockets on key locations in Tel Aviv. In anticipation of Israel’s retaliation, investors in all major global markets sold their exposure to leading cryptos, stocks, and commodities.
Fears of a Big War Loom Over the Middle East
The Middle East has been the epicentre of tension for many months. After Israel’s invasion of Palestine, it launched attacks against Hezbollah in Lebanon in the second half of September. Amid rising tensions, Iran lost major leaders, and as retaliation, it launched a major attack on Tel Aviv on Tuesday.
Tehran fired more than 200 rockets on Tel Aviv as people were seen running for their lives in the Israeli capital. Political experts and analysts fear a rise in tension amid possibilities of a counterattack by Israel on Iran.
Bitcoin Takes Major Hit, Drops Around $5k in 5 Days
As expected, the crypto market didn’t take the news positively. It dealt a major blow to all markets across the globe during early trading hours in Asia on Wednesday. Bitcoin was one of the recipients of this major shift in the mood. From $66,212.87 on Saturday, Bitcoin fell below $61,000 on Wednesday, a steep 7.36% or 4,843.38 points decline. Nobody saw it coming. Crypto analysts have been talking about the traditional October rally in the Bitcoin halving year for months, and the rising Middle East escalations have disrupted the euphoria. Similarly, CoinDesk recorded the worst drop in weeks.
Traditional October Rally in Jeopardy
Crypto enthusiasts had been waiting for the month of October in anticipation of a major rally, which has been the main feature of October rally in the Bitcoin halving year. However, the Iran-Israel escalation has left everybody in the crypto world scratching their heads. No one could anticipate such an event to spoil the positive mood in the crypto market.
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At one point on Wednesday, Bitcoin lost more than 6% over a month. On the other hand, gold recorded positive moves. This is the worst start to the month of October for Bitcoin in a halving year. According to the betting site Polymarket, 49% of bettors believe Israel will launch a counter-strike against Iran by the end of this week.
Presto Research traders stated, “Historically, October rally has been a strong month for BTC with only two losing years out of the last 11.” The Presto further pointed out gold’s outperformance in the past 24 hours, saying, “Last night’s BTC price action (BTC -4% vs. gold +0.8%) in the aftermath of Iran’s attack in May puzzling, esp. considering BlackRock’s recent pitch for BTC as a risk-off asset similar to gold. The reality is that the difference in these two assets’ short-term price actions reflects their different maturity phases.”
Bad Day for Altcoin Investors
Bitcoin was not the only cryptocurrency bearing the brunt of the escalation in the Middle East. Altcoins also felt the heat of the political tension. Led by Dogecoin, altcoins also bled big time. Dogecoin slumped by 8% in 24 hours, followed by XRP, Solana, BNB Chain, and ether, losing as much as 6%.
That’s not all, smaller crypto coins with a market capitalisation under $2 billion faced an even worse time on Wednesday. SEI Network as well as meme coin Floki Inu and Starknet, plummeted by as much as 16%.
Conclusion
Amid the rising clouds of war in the Middle Eastern region, the crypto market is fighting a battle of its own. After hopes of a major bull run in October were spoiled by the poison of brewing war between Iran and Israel, analysts fear rangebound or bearish sentiments to prevail in the next few days.
For more updates about the brewing tension in the Middle East and its effect on cryptocurrencies, stay tuned to The BIT Journal. Follow us on Twitter and LinkedIn, and join our Telegram channel to be instantly informed about breaking news!
The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.
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