Crypto market shows resilience as Iran-Israel tension escalates
Crypto prices have rallied back after a steep Iran-Israel conflict selloff.
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The crypto market experienced a brief downturn over the weekend as geopolitical tensions between Iran and Israel escalated, causing momentary turbulence in global markets. However, the crypto market has displayed remarkable resilience amid the conflict, with a noticeable recovery in the opening hours of this week.
Bitcoin (BTC), the largest cryptocurrency by market capitalization, dipped as low as $60,800 as the conflict spread, with the market pullback resulting in a loss of approximately $962.40 million in liquidations.
Analysts attributed this downturn to the anticipated consequences of war, such as rising commodity prices and the potential for high inflation, which could make interest rate cuts by central banks less likely.
“During a war, commodities like oil and gold rise in value, which results in high inflation. High inflation means no rate cuts, which is bearish for stocks and crypto. This is why crypto sold off heavily yesterday, as people anticipated that this war could lead to high inflation, which would result in no rate cuts,” notes Ash Crypto in an X post.
Despite the initial downturn, Bitcoin and key altcoins have rebounded significantly. At the time of writing, Bitcoin is trading at $65,170, marking a 2.66% gain over the last 24 hours. Ethereum (ETH) and Solana (SOL) have seen even more substantial rebounds, up 7% and 12.8% respectively.
Mike Novogratz, CEO of Galaxy Digital, predicted a price recovery after the initial sell-off, stating, “Wars cost $$$…. Praying we don’t get a bigger one, but after the risk flush, BTC will resume its trend (higher).”
Given the current geopolitical tension, Novogratz’ statement is optimistic that the market would prevail over the effects of a major regional conflict, pointing to the importance of market stability to achieve growth in the crypto industry and its lateral sectors.
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