Escalating Israeli-Iranian Tensions Ripple Through Crypto Markets
The crypto market experienced something like a Deja vu as all coins took a significant nosedive over the weekend. Many are comparing it to the lockdown announcement in 2020 that left many cryptos free-falling.
The only difference this time is that there is no COVID, and there are no lockdowns. This time, it's the uncertainty of war, options expiry, historical Bitcoin halving patterns, macroeconomic factors, and technical chart that have caused the crypto market to react, or "overreact" in a negative way, according to some X(Twitter) analysts.
So what events led to Bitcoin dropping 10% and Altcoins like Solana dropping up to 20% in less than 48 hours?
Sometime around April 1st, it was reported that Israel had attacked the Iranian embassy in Syria. The airstrike was reported to have killed 16 people, including two members of Iran's Islamic Revolutionary Guard Corps. Many foreign policy experts feared that the attack could be the spark that ignites the Middle East.
Around 9 pm WAT on Saturday, April 14th, major news outlets within the Middle Eastern region were reporting that Iran had launched dozens of suicide drones at Israel in retaliation for the suspected Israeli strike on its diplomatic complex in Syria. Western news outlets confirmed this news shortly after, and all hell broke loose in the crypto market.
The selloff that had begun on Friday continued as the Iran-Israel conflict escalated, tanking the BTC price to $60,600. Bitcoin triggered a selloff in the crypto market, with Ethereum price plunging nearly 20%. This caused altcoins SOL, XRP, ADA, DOGE, SHIB, and others to fall 20-50%. Meme coins are among the most liquidated cryptocurrencies in the last 48 hours.
In the early hours of Sunday, April 15th, Iran announced that they had concluded their retaliatory attack after Israeli forces claimed to have intercepted 99% of the drones launched from Iran. After this announcement, Bitcoin gained $5,000 in price, and Solana went from $127 to $147.
Many financial analysts believe a road to recovery for the crypto market, at least until the halving, could be largely determined by the response of Israel after the attack from Iran.
According to Markus Thielen, CEO of 10x Research, Bitcoin miners could sell $5 billion in Bitcoin after the halving event, with whales leading the sale. Considering the current market situation, the value is expected to be much lower than expected.
If the price remains below support and fails to exceed the 20-simple moving average (orange), the BTC price will stay under selloff pressure. As of this writing, ETH is trading at around $3,100.
