Key Takeaways:
- Bitcoin price crashed on Oct. 9 after news of conflict between Israel and Hamas.
- The war could drive investors away from risk assets.
- However, the BTC price might be safe if the skirmish does not translate into an all-out war.
NEW DELHI (CoinChapter.com) — Bitcoin’s (BTC) price reacted bearishly to the recent outbreak of violence between Israel and Hamas, with the token’s price dropping 2.5% to reach a daily low near $27,280 on Oct. 9.
Bulls recovered some of the lost gains of the day, but the bearish pressure against the BTC price continues. The impact of the Israel-Hamas conflict was significantly lower than when the Russia-Ukraine war broke out, which resulted in stock markets crashing before bouncing back the same day.
On Oct. 9, the S&P 500 closed trading with 0.63% gains, a minuscule number but an indicator of positive investor sentiments. Gold derivatives also closed on Oct. 9 with gains of nearly 1.6%.
However, the recent violence might not be a bearish headwind for risk assets like Bitcoin. In a Wall Street Journal article, James Mackintosh penned that the market conditions could escalate if “Iran and Israel were drawn into direct conflict.”
Impact On Bitcoin of Israel Hamas War
If Iran and Israel declare an all-out war, global markets would likely see a bearish response from investors. Market participants generally favor safer investment avenues to risk assets in turmoil.
However, the crypto analysis YouTube channel ‘CryptosRUs‘ noted that in the short term, BTC prices might not face severe backlash from the Israel-Hamas conflict.
In a video, the analyst noted that the upcoming halving event would likely add to the bullish cues for the token, given that the BTC price has performed remarkably well after each halving event. BTC price has reached a new ATH multiple times more than its previous ATH after each halving.
For example, BTC price’s ATH after the second halving, $19,785, was nearly 1,500% more than its ATH after the first halving event. However, CryptosRUs warned that Bitcoin might not paint such a bullish rally after its halving in 2024 due to macro tailwinds.
Yet, it is likely that investors might turn to Bitcoin if the US is forced to enter the war in support of its ally, Israel. The US government is already reeling under massive debt, and a war effort would likely result in a spiral of inflation, rate hikes, bank failures, etc., similar to how the markets started in 2023.
During the first six weeks of 2023, BTC price rallied by 53% to cross above $25,000 before correcting, riding on the FUD created by bank failures and recession fears. If there is a prolonged war, Bitcoin might see investor interest as investors move to safeguard their money.
In addition, CryptosRUs noted that the BTC price had formed a fractal similar to its last two halvings. However, the analyst noted that
It [BTC price action] doesn’t always repeat, but it tends to rhyme, and that’s exactly what’s happening right now
Bitcoin Outperforms Other Asset Classes In 2023
CryptosRUs noted that Bitcoin was the top-performing asset class for 2023 compared to stock market indices, equities, corporate bonds, and US Treasuries.
NYDIG stated that Bitcoin price returned over 63% gains YTD, outclassing the US Large Cap Growth portfolio, which came second with 28% gains. Moreover, BTC price’s YTD performance comes after a particularly dismal performance in Q3 2023, a historically bearish quarter for the token.
Binance CEO Changpeng Zhao also commented on Bitcoin’s upcoming halving event, stating that traders often expect BTC prices to rocket immediately after a halving event. Zhao noted that while halvings are bullish cues, it takes some time for BTC prices to rally, stating:
The day after the halving, the bitcoin price won’t double overnight. And people will be asking why it didn’t. The year after the halving, bitcoin price hits multiple ATH (all time highs). And people ask why. People have short memories.
CryptosRUs also noted that the hodling mentality among investors has dropped, highlighting that less than 12% of BTC’s circulating supply changed hands since July 2023.
BTC Price Facing Strong Bearish Pressure
Meanwhile, BTC is facing strong selling pressure as bears try to push Bitcoin prices below $27,000.
BTC bulls defend the 20-day EMA (red wave) and 100-day EMA (blue wave) dynamic support confluence. If Bitcoin price continues to downtrend, the token could drop to the 200-day EMA (green wave) support near $27,130.
Breaching the immediate support might force the BTC price to test the support near $25,800. Conversely, a rally from here might help BTC’s price reach the resistance near $28,460. Crossing above the immediate resistance could help Bitcoin price rally to the resistance near $29,640 before correcting.
The RSI for BTC remained neutral, with a score of 55.09 on the daily charts.
The post How the Israel-Hamas War Affects Bitcoin Investors appeared first on CoinChapter.
