Crypto Market In Turmoil After Iran-Israel Tensions

The crypto market has suffered a sharp decline following the escalation of tensions between Iran and Israel. Bitcoin fell by almost 8%, leading to over $1 billion in liquidations on the crypto market.

Crypto market plunges as Iran-Israel tensions escalate

Geopolitical tensions in the Middle East hit the crypto market hard this weekend. On Saturday April 13, Iran launched a massive drone and missile attack against Israel in retaliation for an Israeli strike in Syria killing Iranian officers. This military escalation caused a storm on the financial markets, including the crypto sector.

In reply, Bitcoin, which had reached $68,000 after Friday’s dropped more than 9% to around $60,000. According to a recent report by Bloomberg, Bitcoin’s decline was the biggest since March 2023.

Ethereum fell by 7% to under $3,000, while Binance Coin (BNB) dropped by 9%. Solana, meanwhile, saw a significant drop of 12% in 24 hours, and more than 22% over 7 days.

In all, the crypto market capitalization lost over $260 billion. This fall was accompanied by the heaviest liquidations in 6 months, with $1.5 billion worth of crypto liquidated on Friday and Saturday.

A lukewarm response from cryptocurrencies

Although the market initially plunged following the announcement of the Iranian attack, bitcoin and other cryptocurrencies subsequently cut some of their losses.

Indeed, after Iran claimed that the attack was a “legitimate defense” and that the conflict could be considered “over”, Bitcoin rose from $60,000 to $65,000 in just a few hours.

Despite this rebound, the balance sheet remains negative for Bitcoin, which closed the day down 5.63% over one day, 7.28% over one week and 11.75% over one month.

However, trading volume increased substantially, by over 21% in 24 hoursa sign of strong speculative activity on the market.

According to Zaheer Ebtikar, founder of the Split Capital crypto fund, the next move of crypto is linked with a potential escalation of the situation.

Despite Bitcoin’s sharp 150% rise over the past 6 months, thanks in particular to the success of Bitcoin ETFs in the U.S.the situation remains precarious. Investors will need to remain cautious in a market that seems increasingly influenced by exogenous factors, such as geopolitical tensions in the Middle East. Let’s wait and see what the next few days bring, especially as the halving season approaches in leaps and bounds.