The Middle East faces further escalation of tensions, while Bitcoin has a difficult start in October, the traditional peak season
The escalating tensions in the Middle East have led to a difficult start for Bitcoin in the traditional peak season of October, with an early decline of about 3%. After Iran launched missiles at Israel, Bitcoin experienced its largest drop in nearly a month, with a trading price of around $61,825. Despite historically strong performances in October, geopolitical risks have made the market cautious. The trading director of liquidity provider Arbelos Markets believes that this sell-off is temporary and that the market may rebound in the future due to potential interest rate cuts by the Federal Reserve and the new government's cryptocurrency-friendly policies
Zhitong Finance and Economics APP noticed that Bitcoin speculators, who were hoping for the seasonal rise of Bitcoin in October, are facing an early reality check as the escalating tensions in the Middle East have triggered cautious sentiment in the global markets.
On Tuesday, after Iran launched about 200 ballistic missiles at Israel, this digital asset saw its largest drop in nearly a month, as the hostile actions between the two adversaries escalated sharply but briefly. The token regained some of its losses on Wednesday, with its trading price around $61,825 at the time of writing.
Data shows that Bitcoin fell by about 3% in the first two days of October, sharply contrasting with the average 20% increase throughout the entire month over the past 10 years. This seasonal hint had previously led some traders to anticipate Bitcoin breaking the record high of $73,798 set in March, but it can be said that the most significant geopolitical escalation in the global market has poured cold water on the optimists.
October is usually the most eye-catching month for Bitcoin performance.
Sean McNulty, trading director at liquidity provider Arbelos Markets, believes that given the Federal Reserve has started cutting interest rates, this sell-off is a "temporary setback." He mentioned that the government that emerges after the U.S. presidential election in November may also be more crypto-friendly.
McNulty added: "October is the best month for Bitcoin, and this seasonal trend still exists.
Currently, as Israeli Prime Minister Netanyahu vows to retaliate against Iran's attacks, the market remains vigilant about escalating conflicts. U.S. stock futures fluctuated on Wednesday, while oil prices rose due to supply concerns.
Recently, the trend of digital assets has been more synchronized with the stock market, indicating that macroeconomic drivers such as the Federal Reserve's monetary policy outlook are crucial for Bitcoin. Data shows that the 50-day correlation coefficient between the top 100 digital tokens and the MSCI Global Stock Index is 0.65, the highest level since 2022. A reading of 1 indicates synchronized asset trends, while a reading of -1 indicates opposite trends