On Tuesday, Bitcoin (BTC) fell below the critical threshold of $63,000, indicating a broader decline in the cryptocurrency market, which has lost nearly $200 billion in total. market capitalization at the weekend.
This drop follows Bitcoin’s recent two-month high of $66,500, reached last Friday, which fueled bullish sentiment among investors looking ahead to the final quarter of the year. However, the series of development of the countryespecially the rising tensions in the Middle East, may test the resilience of risky assets like Bitcoin.
Bitcoin Under Pressure As Investors Sell Gold
Market expert Jeroen Blokland, founder of Blokland Smart Multi-Asset Fund, noted that global investors are increasingly selling Bitcoin to buy gold, a trend seen in the BTG chart below, is considered a key contributing factor to Bitcoin’s recent price correction.
Blokland links the cryptocurrency struggles to growing tensions between Iran and Israel, which have escalated over the past month. This situation has raised concerns about investor confidence, as gold it is a historically stable asset that can withstand volatility in the digital currency market.
The situation became more tense on Tuesday when missiles were launched it is reported that launched from Iran towards Israel, prompting urgent warnings from the White House. Officials have revealed that Iran was preparing a possible ballistic missile attack on Israel, raising fears of a major conflict in the region.
The White House said it actively supports Israel’s defense preparations and warned of dire consequences for Iran in the event of an attack on the military.
Historically, Bitcoin has been called “digital gold,” but due to ongoing economic uncertainty coupled with global unrest, fear global recession a large loom. This volatility may prompt investors to seek refuge in stable assets, contributing to downward pressure on Bitcoin.
Analysts Warn of Overbought Conditions
Analysts have also raised concerns about Bitcoin overbought conditions following a nearly 5% climb in the week leading up to September 27. The attack coincided with a significant increase in net inflows into global crypto exchange-traded products (ETPs), reaching the highest levels since mid-July.
Last week, the combined purchase volume of US Bitcoin exchange-traded funds (ETFs) reached 16,774 BTC, exceeding the one-month supply of newly mined Bitcoin, which stands at about 13,500 BTC.
However, this feeling faced reality on Monday when the Chairman of the Federal Reserve (Fed) Jerome Powell warned investors in the middle of the afternoon.
According to on CNBC, Powell indicated that the central bank is not following a predetermined path while rate cuts are imminent. This statement led to a state of caution among investors, perhaps contributing to the reversal of the largest cryptocurrency in the market.
At the time of writing, BTC is trading at $62,130, down more than 2% in the last 24 hours.
Featured image from DALL-E, chart from TradingView.com