Key Takeaways:
- Traders ignore Bitcoin amid Middle East tensions.
- The Israel-Hamas conflict risks sending investors toward traditional safe-haven assets like gold and the US dollar.
- Key events that could influence Bitcoin price include the FOMC minutes.
YEREVAN (CoinChapter.com) — Bitcoin (BTC) price started the week in losses as investors rushed away to seek safe havens elsewhere amid the escalating Middle East conflict.
Bitcoin Fails Safe Haven Test Amid Israel-Palestine Conflict
The BTC price dropped nearly 2.5% on Oct. 10, mirroring stock market losses that hint at a growing risk aversion mood. On the other hand, gold and oil rallied, the US dollar stabilized after early buying, and the yield on the 10-year US Treasury note dropped about 3.5%, indicating bond buying.
Bitcoin’s underperformance during a geopolitical conflict brings afresh memories of March 2020. Despite its safe haven claims, the cryptocurrency failed to provide safety to risk-averse investors when the COVID-19 pandemic rattled global markets.
Instead, its 30-day average correlation with equities grew higher. Ideally, previous Middle East crises have helped raise demand for assets like the dollar and gold. Will investors be shifting their attention to Bitcoin as tensions rise further? So far, the possibilities are less.
FOMC Minutes, PPI in Focus This Week
The Federal Open Market Committee (FOMC) minutes and the Purchase Price Index (PPI) will be released on Oct. 11. Meanwhile, the Core Consumer Price Index (CPI) report will be out on Oct. 12, shedding more light on whether or not the Federal Reserve‘s rate tightening spree has tamed inflation.
In September, the Fed kept rates steady at 5.25-5.50%. They upgraded economic growth to “solid” but noted slower job gains. Inflation remains a concern, with projections at 3.3% in 2023. The Fed sees a rate hike this year and potential cuts in 2024.
Jerome Powell emphasized caution, acknowledging strong growth and low unemployment. Some doubt the Fed’s optimistic forecasts, expecting weaker economic performance and a quicker return to target inflation. They anticipate larger rate cuts next year.
Bitcoin has rallied in the past year despite rate hikes, suggesting that most investors braced for a Fed pivot. They also anticipate a Bitcoin ETF approval in 2024, with analysts suggesting it would attract a minimum of $150 billion to the crypto market.
Bitcoin Technical Analysis Amid Middle East Conflict
Technically, Bitcoin has stabilized above the double-support in the form of its 50-day and 200-day exponential moving averages (EMAs) near $27,000. This confluence also picks strength from BTC’s ascending trendline.
A break below the support group risks crashing Bitcoin toward $25,000. Meanwhile, a rebound raises the cryptocurrency’s potential to rise toward $30,000, which seems less likely as the Middle East tensions raise bets for safe havens like the dollar, gold, and oil.
The post Bitcoin Week Ahead Ep33: Middle East Tensions Expose BTC Safe-Haven Claims appeared first on CoinChapter.
