The conflict between Israel and the militant political group Hamas in Palestine is still ongoing. This conflict in the Middle East may spill over into the cryptocurrency markets and result in a sort of trend decline in riskier assets like Bitcoin, as per several traders.
According to Greta Yuan, head of research at the crypto platform VDX, investors are still quite sensitive because of concerns on the global market that the collapse will spread to nearby oil-producing nations. He added, “As the geopolitics of the Middle East worsened over the weekend and market risk-averse sentiment increased, as a result, spot gold rose by nearly 1%.”
On Monday, the crypto markets had earlier fallen 2% as investors anticipated higher oil prices and a decline in traditional equities because the unrest might affect global trade.
Over $100 million was liquidated for those who had bet on higher prices for 24 hours starting on Monday as alternative currencies experienced a sell-off. However, the cryptocurrency markets are displaying early signs of resiliency that could inspire bulls with confidence.
Jeff Mei, chief operating officer of crypto exchange BTSE, “Currently, we’ve observed a temporary dip in Bitcoin’s price following the shocking news of the conflict, but the price has already stabilized. Crypto assets have shown resilience in the face of rising geopolitical turmoil in the past.”
Meanwhile, some traders advise investors to monitor changes in the oil and energy markets for the time being to get a sense of where bitcoin might be headed.
“However, if we see a quick return to some form of normalcy, that would be a positive for cryptocurrencies. But for now, that looks like a less likely scenario,” according to Kuptsikevich, who also noted that right now, the likelihood of a decline in interest in stocks and cryptocurrencies is higher than it has been in recent weeks.