Bitcoin Suffers Notable Price Plunge Amidst Geopolitical Tensions in the Middle East

Bitcoin, the world's leading cryptocurrency, suffered a notable plunge in price in the first three days of October. This slip is due to geopolitical tensions in the Middle East, which have sparked global market concerns.

World’s leading cryptocurrency, Bitcoin, has seen a notable slip in its price during the first three days of October. This price decrease is attributed to geopolitical tensions in the Middle East, which have sparked concerns in the global market.

Bitcoin’s price has dropped by 0.67% within 24 hours to $60,572.10, as per data. However, this 1% slip does not fully capture the larger loss that the digital asset has faced so far this month. A closer look at BTC’s price reveals an approximate 5% downward movement, which is largely influenced by the Middle East crisis.

During the last few days of September, BTC was seen trading around the $64,500 level. The market anticipated a more positive start to the month to drive the “Uptober” narrative. But following the missile strike by Iran on Israel on October 1, the asset lost nearly $4,000. Investors seem to have adopted caution as the war rhetoric intensifies, with Israel’s Prime Minister vowing to retaliize.

This anticipation of a full-scale conflict in the Middle East might have ignited a major liquidation fever. According to Coinglass data, 97,354 traders were liquidated in the past 24 hours, bringing the total liquidations to $274.21 million.

Bitcoin and Ethereum recorded the highest crypto liquidations at $57.97 million and $65.26 million, respectively. An estimated $700 million has been liquidated over the past few days, with BTC traders accounting for a huge fraction of that volume.

Interestingly, when Iran launched drone attacks on Israel in mid-April, the price of BTC dropped by over 8%. This volatility and response to geopolitical conflict have raised concerns regarding Bitcoin’s future. Some investors have questioned the reliability of the cryptocurrency as a security and safe-haven asset.

Over the years, Bitcoin has emerged as a reliable hedge against inflation and a suitable long-term investment option. However, some believe that the digital asset is still in a state of transitioning to replace other assets like gold.

Markus Thielen, Head of Research at 10x, maintained that Bitcoin’s price might continue to face headwinds from external factors. These include economic and liquidity cycles, as seen from the U.S. Federal Reserve interest rate cut.

Despite all these, Bitcoin has continued to attract the interests of institutional investors. Overall, these investors’ accumulation of BTC remains relatively higher than the mined supply, helping to maintain its value.

Additionally, in the long term, Bitcoin’s scarcity and the halving mechanism will play a crucial role in maintaining price stability. Experts insist these factors will help support Bitcoin in the long run and keep it bullish.

In the broader financial market, Middle East tensions pushed the price of crude above the $70 level, with Brent and Murban crude selling for $75.65 and $75.35 at the time of writing, respectively. Meanwhile, gold, after reaching a new high of $2,665 per ounce following the missile strike, has corrected to $2,646.30.

Despite speculation that a possible escalation might have caused some downward price movement, analysts anticipate a rebound soon. Their optimism lies in the growing acceptance of digital assets through Exchange-Traded Funds (ETFs).

The Spot Bitcoin ETF, launched in January, has performed well overall. As per data, the total net assets of all U.S. spot BTC ETFs have topped $55.80 billion, indicating that institutional investors are still heavily invested in the growth trajectory of Bitcoin.

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