The price of Bitcoin plummeted nearly $4,000 in under 24 hours following an Iranian missile strike on Israel late on October 1.
The cryptocurrency was trading slightly above $64,000 on Tuesday but suffered a significant drop, reaching just over $60,000 after the attack.
Since then, BTC has rebounded to approximately $61,700 during Wednesday morning trading in Asia; however, it is still down by 3% for the day.
No Need to Panic
Market sentiment has swiftly shifted from ‘greed’ just a few days prior to ‘fear’ today, as indicated by the Bitcoin Fear and Greed Index.
Bitcoin Fear and Greed Index reads 42 – Neutral
Current price: $60,836 pic.twitter.com/gi3cDBB2L6— Bitcoin Fear and Greed Index (@BitcoinFear) October 2, 2024
This reaction is not unprecedented, as the sell-off is largely driven by emotional responses. While some consider Bitcoin a ‘safe haven’ asset, its value has previously experienced similar downturns amid geopolitical strife.
For instance, BTC dropped over 13% following Iran’s drone attack on Israel in mid-April.
In contrast, commodities such as gold and crude oil have increased in value today. Bitcoin pioneer Samson Mow highlighted this irony in a post on X on October 2.
Imagine trying to protect against war by selling #Bitcoin to buy paper gold that you can’t move anywhere during actual conflict. https://t.co/KX6WDaBJiM
— Samson Mow (@Excellion) October 2, 2024
Observers do not seem overly worried, as Bitcoin continues to trade within its six-month range-bound channel despite the recent selloff.
Veteran trader Peter Brandt noted that the latest surge did not disrupt the pattern of declining highs and lows.
“Only a close above $71,000 confirmed by a new ATH will indicate that the trend from the November 2022 low remains intact,” he stated.
Meanwhile, analyst “IncomeSharks” predicts further declines before a potential upturn later this month.
#Bitcoin – We are all making predictions here. If we are to experience ‘Pumptober,’ this scenario is likely. Convince people that $59k is the low, but then dip to $57k. This would turn sentiment bearish, prompting sales before a reversal. Gradually rise and end the month in the red, then green in November. pic.twitter.com/33wAPHswyz
— IncomeSharks (@IncomeSharks) October 1, 2024
‘Rekt Capital’ predicted that BTC would test support at $59,800 after a pullback from resistance levels within the channel.
Elsewhere on Crypto Markets
The looming threat of conflict in the Middle East has unsettled the entire crypto market, with total capitalization declining by 4.7% in one day, equating to about $150 billion. The current market cap sits at $2.26 trillion, according to CoinGecko.
Ethereum dropped nearly 8%, falling to $2,450, before making a slight recovery during Wednesday’s Asian session.
As is often the case, altcoins suffered even greater losses, with notable declines for Dogecoin (DOGE), Toncoin (TON), Avalanche (AVAX), Shiba Inu (SHIB), Chainlink (LINK), and Polkadot (DOT).
In summary, this is yet another instance of volatility in crypto, marked by the panic of investors with little faith in the asset class.
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