The crypto market has been hit with a wave of uncertainty as tensions between Israel and Iran escalate, putting the projected ‘Uptober’ rally at risk. Iran has launched missile attacks against Israel in retaliation for Israel’s actions in Lebanon, including a ground invasion of Southern Lebanon and the assassination of Hezbollah leader Hassan Nasrallah.
This latest development has already had a negative impact on the crypto market, with Coinglass data showing that over $351 million has been liquidated in the last 24 hours. Bitcoin prices have also dropped below $63,000 following news of Iran’s imminent attack. Conflicts like the Israel-Iran tension typically lead to a wave of sell-offs in the market as investors seek to reduce their exposure to risk.
This isn’t the first time tensions between Iran and Israel have affected the crypto market. In April, Iran launched a drone and missile attack on Israel in retaliation for an airstrike that killed a top Iranian general in Syria. Bitcoin slumped by over 8% following that incident, with the broader crypto market suffering a similar fate.
According to a CoinGape analysis, Bitcoin was already expected to correct as its price slipped below $65,000. The Israel-Iran tension has only acted as a catalyst for this price correction. Fear, uncertainty, and doubt (FUD) are expected to return to the market as panic sells set in. However, on-chain analytics platform Santiment suggests that FUD returning to the market could actually be bullish in the long term.
Santiment claims that the crowd’s bullish sentiment towards Bitcoin indicates a high probability for the crypto market. Once panic sells occur and FOMO turns to FUD, the platform predicts that the bull market can resume shortly after. Despite the current market turmoil, there is hope that the crypto market will bounce back from this setback.
As the Israel-Iran tension continues to unfold, market participants will be closely watching for any further developments that could impact the crypto market. The global markets are on edge, and the crypto market is no exception. Investors will need to stay vigilant and adapt to the changing landscape to navigate these uncertain times.