Cryptocurrency markets experienced a downturn on Friday due to heightened tensions in the Middle East. Bitcoin dropped 5% to below $67,000, and Ether fell 9% to around $3,200.
The tensions arose from events in Syria involving Iran‘s IRGC military leaders and concerns about potential retaliation against Israel. The U.S. reportedly deployed warships in support of Israel. This added to existing tensions since the October 7th Hamas attack on Israel and Israel’s subsequent response in Gaza.
Global financial markets reacted, with the S&P 500 falling 1.4% and traditional safe-haven assets like the U.S. dollar and gold rising.
Cryptocurrencies, seen as high-risk assets, faced pressure, though Bitcoin’s decline was less severe compared to many altcoins. Altcoin open interest dropped by 30% and $770 million in leveraged long crypto futures positions were liquidated.
Despite recent volatility, it’s uncertain if the crypto market downturn has ended due to ongoing geopolitical tensions. However, Bitcoin’s resilience suggests it’s viewed by some as a safer asset.
Factors like Bitcoin’s upcoming halving, optimism about ETFs, U.S. deficit spending, and global central bank easing could support the market. A $100,000 Bitcoin price later this year remains possible, but traders should expect continued volatility.
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