The current state of the cryptocurrency market is intricately tied to the evolving situation between Iran and Israel. Recent escalation of conflict, including Iran’s launch of drones and missiles against Israel, has led to significant declines in cryptocurrency prices. Bitcoin plummeted by 10%, marking its largest drop since March 2023. Most other major coins, such as Ethereum, Solana, and Dogecoin, also suffered losses.
Experts suggest that the continuation of cryptocurrency sell-offs will depend on further escalation of the conflict. Investors will closely monitor market conditions as traditional exchanges resume operations after the weekend. Tensions between Iran and Israel have already impacted stocks negatively and bolstered assets like bonds and the dollar.
Data indicates that on April 12 and 13, bullish bets on cryptocurrency worth approximately $1.5 billion were liquidated through derivatives, making it one of the most severe two-day liquidations in the past six months. Experts note that margin calls surged over the past three days, resulting in a significant drop in digital asset prices.
A decrease in net inflows into U.S. specialized exchange-traded funds (ETFs) may also exert pressure on cryptocurrency prices.
Forecast:
The future trajectory of BTC, ETH, and other cryptocurrencies remains uncertain as geopolitical tensions between Iran and Israel persist. Any further escalation in conflict could continue to dampen investor sentiment, leading to additional sell-offs in the cryptocurrency market. However, if tensions ease or if there are signs of de-escalation, it could potentially stabilize or even bolster cryptocurrency prices as investors regain confidence. In the near term, market participants are advised to remain vigilant and responsive to geopolitical developments, as they will likely continue to influence cryptocurrency dynamics.
