Bitcoin Market Reaction: Amid escalating tensions in the Middle East, the Bitcoin market witnessed significant selling, experiencing an 8% decline following confirmation of a hack by US officials.
Price Movement and Recovery: Bitcoin's price fell from around $70,000 to $62,000 on Saturday night but recovered to trade above $64,000 by Sunday morning, according to Bitstamp market statistics. Other currencies like ether also saw selling, with some experiencing 10% declines.
Impact of Geopolitical Events: The sell-off in Bitcoin was interpreted as a response to the rise of tensions in the Middle East, marking the sharpest decline in over a year. The incident, which involved Iranian drone and missile strikes on Israel, heightened market uncertainty and impacted various financial markets, including cryptocurrencies.
In the midst of an unprecedented Iranian drone and missile strike on Israel overnight on Saturday, the bitcoin market saw significant selling.
In the midst of an unprecedented Iranian drone and missile strike on Israel overnight on Saturday, the bitcoin market saw significant selling. (Photo : by Dan Kitwood/Getty Images)
Bitcoin's Response to Rising Tensions in the Middle East
Following confirmation of the hack by US officials, Bitcoin had a late-evening 8% decline. During the weekend, digital currencies were among the few riskier assets that were traded, and their decline was interpreted as a first response to the rise of tensions in the Middle East.
According to statistics from the Bitstamp market, the price of bitcoin fell to around $62,000 on Saturday night from approximately $70,000. It had recovered to trade above $64,000 by Sunday morning. There was also a lot of selling of other currencies, such as ether, with some seeing 10% declines.
The bitcoin sell-off was the sharpest in over a year. The cryptocurrency's price movement has been driven by inflows into U.S. spot bitcoin ETFs, which has caused the coin to achieve new records recently.
The actions of the previous night were the first direct strike on Israel from Iranian territory in the Middle East. According to Israel, "99%" of the 300 "threats of various types" that were headed for Israeli territory have been neutralized.
According to reports, an alleged Israeli assault in Syria that claimed the lives of senior Iranian officials prompted the barrage of drones and missiles launched towards Israel.
Around 10:30 a.m., the unofficial market saw the Iranian currency drop to a record low of 705,000 rials per US dollar. local time on Sunday, based on information gathered by the foreign currency tracking website Bonbast.
The TA-35, the main index of the Tel Aviv Stock Exchange, was down 0.38% at 10:23 a.m. London time.
The market for cryptocurrencies was ecstatic in 2022, especially after hitting record highs in 2021, and numerous altcoins were also showing potential. Nevertheless, growing global tensions dampened investor optimism, resulting in a two-year bear market for Bitcoin and the cryptocurrency space as a whole.
In the nine months that followed Russia's invasion against Ukraine in February 2022, Bitcoin fell from $50,000 to $16,000. Market players are concerned that the market may follow a similar path if tensions in the Middle East increase.
The impending halving event on April 20 might lead to another round of selling pressure from miners and market players, further complicating issues. The course that Bitcoin takes over the next several weeks will be crucial in deciding how it performs for the rest of the year, as it will depend on whether it maintains its upward momentum or gives in to more downward pressure.
