Bitcoin plunges 8% following Iran’s attack on Israel

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14th April 2024 – (New York) Bitcoin, the world’s largest cryptocurrency, experienced a significant slump of 8% after Iran launched an attack on Israel, triggering a wave of concern throughout global markets. This substantial retreat marks the most significant decline since March 2023 and has led to a cautious atmosphere among investors.

On Saturday, the value of Bitcoin plummeted by 7.7%, presenting the most substantial drop in over a year. However, the cryptocurrency managed to regain some ground, reaching approximately $63,230 by Sunday morning. Other major digital coins, including Ether, Solana, and Dogecoin, also witnessed losses over the course of 24 hours.

The attack by Iran, which involved drones and missiles, was seen as a retaliatory measure following a strike in Syria that resulted in the deaths of prominent Iranian military officers. This escalation in tensions has brought the regional conflict to a precarious new phase. As digital assets are traded during weekends, investors view this period as a window into the potential market sentiment when traditional markets resume on Mondays. However, it should be noted that circumstances can change significantly during this time.

The ongoing sell-off in the crypto market may be contingent on further escalation of the conflict, according to Zaheer Ebtikar, the founder of Split Capital, a crypto fund. The upcoming week will likely be crucial in determining the market’s direction and investor sentiment. The attack on Israel has already had a negative impact on stocks, causing investors to seek refuge in assets such as bonds and the US dollar.

The past few days have seen a notable decrease in prices for digital assets, primarily due to overwhelming leverage. Bitcoin has declined by approximately $10,000 from its mid-March record of $73,798. The anticipated Bitcoin halving, set to reduce the token’s new supply by half, is expected to occur around April 20. Historically, such halving events have favoured price increases. However, doubts have arisen regarding the likelihood of a similar outcome this time, given Bitcoin’s recent peak.

The attack on Israel and its implications for global markets have had a tangible impact on the crypto industry. Over the course of Friday and Saturday, approximately $1.5 billion worth of bullish crypto wagers through derivatives were liquidated, constituting one of the most substantial two-day liquidation events in the past six months.