As a seasoned crypto investor with a few battle scars from past market turmoils, I must say that the Israel-Iran tension is never a comforting sight. The recent escalation of hostilities between these two nations has proven to be a significant catalyst for market volatility in the past, and this time seems no different.
To begin October, the cryptocurrency market finds itself in negative territory, and the anticipated ‘Uptober’ surge could potentially face obstacles due to the escalating tensions between Israel and Iran. In response to an attack by Israel on Hezbollah forces in Lebanon, Iran has retaliated with missile strikes against Israel. This is not the first instance of Iran attacking Israel this year.
Crypto Market To Suffer From Israel Iran Conflict
The market faces potential instability due to escalating tensions between Israel and Iran. This stems from Israel’s incursion into Southern Lebanon and the alleged assassination of a Hezbollah leader supported by Iran, which has responded with missile strikes.
Just as predicted, the cryptocurrency market is currently reacting unfavorably to this latest development. According to Coinglass data, approximately $351 million in assets have been liquidated from the market within the past 24 hours. Additionally, crypto prices are tumbling, with Bitcoin dipping below $63,000 after the announcement of Iran’s impending attack.
Tensions between Israel and Iran, such as the ones we’re currently seeing, often create a ripple effect on financial markets due to the uncertainty they generate, causing a surge of selling activities. It is important to note that this isn’t the first time these tensions have intensified in 2021. Back in April, Iran retaliated against Israel with a drone and missile attack following an Israeli airstrike that resulted in the death of a high-ranking Iranian military leader in Syria.
After the recent event, Bitcoin dropped by more than 8%, and the entire cryptocurrency market experienced a similar decline. If Iran carries out its threat, it’s unlikely that this situation will differ from previous ones. Additionally, there are indications that the upcoming Iranian attack could be even more severe than the one in April.
Based on an analysis by CoinGape, it appears that Bitcoin (BTC) may have experienced a correction when its price dipped below $65,000. This drop in price seems to have served as the trigger for this market adjustment.
FUD To Return To The Market
As a researcher observing the cryptocurrency market, it’s clear that Fear, Uncertainty, and Doubt (FUD) could potentially reemerge amidst the escalating Israel-Iran tensions. Just recently, the market was approaching extreme greed, as investors grew more daring with their risk-taking after Bitcoin surged beyond $65,000 last week. Interestingly, Santiment’s on-chain analysis indicates that the return of FUD might actually prove to be bullish in the long run.
Santiment suggests that the public’s optimistic attitude towards Bitcoin might suggest a high likelihood of a peak in the cryptocurrency market. Due to the Israel-Iran conflict, it is anticipated that the price decrease will trigger fearful selling. Once this occurs, the platform forecasts that FOMO (Fear Of Missing Out) could transition into FUD (Fear, Uncertainty, and Doubt), after which the bull market may resume relatively soon.
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2024-10-01 20:33