Key Takeaways:
Bitcoin experienced a significant decline, dropping over 4% amid heightened geopolitical tensions following Israeli airstrikes on Iran. The U.S. has begun evacuations from Iraq in response to fears of escalating conflict in the region. Consequently, the crypto market turned risk-averse, with both Ethereum and XRP also recording substantial losses.
Late Thursday, Bitcoin fell sharply, plummeting more than 4% to settle at $103,556. This drop followed Israeli military actions against Iran, which have exacerbated already fragile relations in the Middle East. The cryptocurrency’s decrease from a 24-hour high of $108,500 was fueled by investor apprehension regarding a potential broader geopolitical crisis, leading to a mass retreat from risk assets. This selloff resulted in the liquidation of approximately $427 million in long positions over the last day.
Israeli officials confirmed that the airstrikes were aimed at military assets near Tehran and Tabriz, characterizing the actions as preemptive measures due to ongoing nuclear threats from Iran.
Developments in the Israel-Iran Conflict
Israeli Prime Minister Benjamin Netanyahu described the operation as essential for “removing this threat” and indicated that it would persist “for as many days as necessary.”
While Iran has yet to officially comment, reports from state media suggest explosions and airspace closures in response to the strikes.
In a related development, the U.S. initiated the withdrawal of diplomats from Iraq and extended voluntary evacuations for military personnel’s families located in nearby countries. The State Department also urged American citizens to exit Iraq, citing a rise in regional instability.
Secretary of State Marco Rubio confirmed that while Israel acted independently, they had informed the U.S. in advance of their military actions.
Former White House advisor Steve Witkoff pointed out that nuclear negotiations with Iran remain under consideration, despite the increased risks involved.
Historically, Bitcoin has demonstrated a sensitivity to geopolitical turmoil, often prompting traders to decrease their exposure to volatile assets in such turbulent times. Although regarded by some as a long-term hedge, Bitcoin’s short-term performance tends to reflect overall risk sentiment in the market.
As Bitcoin faced downward pressure, Ethereum fell below the $2,500 mark, and XRP dropped to $2.10, contributing to an overarching decline across the cryptocurrency market.
Market Dynamics for Bitcoin
At the time of this report, Bitcoin is trading at approximately $103,990, showing signs of potential stabilization after the significant 4% decline triggered by rising geopolitical tensions in the Middle East. The price momentarily dipped below $103,000 following the airstrikes but has since seen a slight rebound.
On a 2-hour chart, Bitcoin remains under significant pressure. The widening of Bollinger Bands indicates increased volatility, with the price clinging to the lower band, suggesting a prevailing bearish momentum.
Current analyses indicate that Bitcoin’s breakout above $106,000 has faltered, potentially foreshadowing further declines. Ethereum has experienced a notable drop in its funding rate, even as open interest remains high, highlighting continued uncertainty in the market.
The Relative Strength Index (RSI) has fallen to 25.51, which is deeply within oversold territory and may suggest a possibility for a brief relief rally. However, with the MACD displaying heavily negative values (-438.59), bearish momentum persists.
In a more detailed timeframe analysis, Bitcoin struggles to reclaim the critical $105,000 mark. Here, the RSI sits at 32.30, near oversold levels, while MACD reflects an ongoing downtrend, intensifying downside risk should support levels fail to hold.
Bollinger Bands indicate a bearish squeeze that has broken to the downside, further complicating the outlook. The 1-minute chart shows minor recovery attempts, with the RSI rising to 66.49 and MACD indicating bullish crosses; however, this minor uptick lacks confirmation from lower timeframes, implying necessary caution.
Key levels have emerged, with immediate support at $102,533 and resistance at $105,693. A close above $105,000 could alleviate selling pressure, while failure to breach this level might pave the way for losses extending toward the $100,000 mark. As it stands, market sentiment remains risk-off, and Bitcoin bulls must defend current levels to prevent a more significant correction.
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