Cryptocurrencies lost up to 13% and failed to recover from the impact generated by the flight of risk assets the previous day, when Iran attacked Israel. What is expected in the coming days?
He conflict in the Middle East harmed everyone risk assets, but above all to the world of cryptocurrencies. Bitcoin hits two-week lows and stands at US$61,000 with a decrease of more than 4%, while Ethereum drops 6.6% to US$2,400. The rest of the cryptocurrencies operate with losses of up to 12.9% led by Near Protocol, Shiba Inu (-11.06%) and Dogecoin (-10.2%).
The world in tension impacts cryptocurrencies
Iran’s missile attack on Israel has once again triggered tension in the region after the Jewish State has invaded in a “limited, localized and specific” manner on the southern border of Lebanon. The president of Israel, Benjamin Netanyahu, assured that Iran “has made a mistake” and that “it will pay for it.” For its part, Tehran has warned that it will respond with “more severe” actions if attacked. Furthermore, through the social network X, the Iranian Foreign Minister, Abbas Araghchi, stressed that Iran has maintained a “enormous restraint for almost two months, to make room for a ceasefire in Gaza.
“The situation remains unstable. If the situation is resolved quickly, for example, as when Iran launched missiles at Israel in April, we could see a fleeting rush to safety, and we would expect stocks and technology companies to recover. If the United States is drawn into this conflict and has to defend Israel, the impact of today’s events on the financial market will be more lasting. The next 24 hours will be crucial to see to what extent this situation worsens,” said Kathleen Brooks, director of research at XTB.
This expert also points out that the proximity of the US elections may generate more turbulence than desired. “The world’s largest Western power is changing leaders at the same time as tensions in the Middle East are raging. This is likely to increase the volatility experienced by financial markets, and we expect asset prices and sentiment risk factors are sensitive to the headlines and news flow in the coming days,” adds Brooks.
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The worst start to October for Bitcoin
These events have led to the worst start to October, the most bullish month for bitcoin, which suffered its biggest drop in more than a month. In fact, futures linked to major tokens recorded more than $450 million in long liquidations in the last 24 hours, according to data from CoinGlass
This analysis firm points out that bitcoin operators who were betting on highest prices lost over $122 million, while ETH bets lost nearly $100 million. Other smaller alt tokens recorded more than $85 million in liquidations, the highest figures since July. In total, almost nine out of ten of futures bets were bullish.
For their part, the exchange traded funds BTC spot ETFs recorded net outflows of $242.6 million in their worst day since September 3. These departures broke an eight-day streak of entries. Meanwhile, ETH spot ETFs also suffered on Tuesday with outflows of $48.5 million, the worst day since September 23.
Source: Ambito
