Middle East Tensions Douse Bitcoin's October Rally Hopes, Short-Term Pullback Tests Bullish Resilience

Middle East Tensions Douse Bitcoin's October Rally Hopes, Short-Term Pullback Tests Bullish Resilience

Middle East Tensions Douse Bitcoin's October Rally Hopes, Short-Term Pullback Tests Bullish Resilience

 Middle East Tensions Douse Bitcoin

Bitcoin bulls hoping for a seasonal October rally are facing an early reality check as heightened tensions in the Middle East have injected caution into global markets. As of press time, Bitcoin has pulled back after an earlier rally, trading around $61,766.81. The digital asset tumbled nearly 5%, its biggest drop in a month, on Tuesday after Iran launched around 200 ballistic missiles toward Israel, causing a sharp but brief escalation of hostilities between the two countries.

The event has raised concerns among investors about risk appetite in global markets, casting a shadow over Bitcoin's short-term trajectory. Bitcoin has averaged a 20% gain in October over the past decade, according to data compiled by Bloomberg. This historical pattern had fueled hopes that Bitcoin could break its all-time high of $73,798 set in March, but the largest geopolitical fault line in global markets has poured cold water on the optimism.

Sean McNulty, trading director at liquidity provider ArbelosMarkets, believes the sell-off is just a "temporary setback." He pointed out that the Federal Reserve has already started easing monetary policy, while the incoming administration following the US presidential election in November is also likely to be more crypto friendly. "October is the best month for Bitcoin, that seasonal trend remains strong," McNulty added.

For now, markets are on edge over Israeli Prime Minister Benjamin Netanyahu's vow to retaliate for the Iranian attacks, concerned about escalating conflict. Digital assets have recently become more correlated with equities, suggesting macro-economic drivers such as monetary policy are now paramount for Bitcoin. The 50-day correlation between the top 100 cryptocurrencies and the MSCI Inc. global equity index is 0.65, the highest since 2022, according to data compiled by Bloomberg. A reading of 1 means assets move in sync, while a reading of -1 denotes an inverse correlation.

"The geopolitical crisis environment looks unfavorable to risk assets," said Caroline Mauron, co-founder of digital asset derivatives trading liquidity provider OrbitMarkets.

While immediate geopolitical risks are putting pressure on Bitcoin in the short-term, many analysts remain bullish about its long-term prospects. With the global economy gradually recovering and institutional investors continuing to enter the market, Bitcoin's value is still expected to grow steadily. However, in the current environment, investors need to remain vigilant, closely monitor global market trends, and make investment decisions based on their own risk tolerance.

Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])

Previous 2024-12-22
Next 2024-12-22

Guess you like