Bitcoin and Ethereum prices fell sharply over the weekend as rockets flew through the Middle East, showing just how quickly geopolitical crises can cause shock waves through the financial markets. A joint US-Israel attack on Iran triggered a violent sell-off that wiped billions of dollars from the crypto market within hours. New reports now indicate that Bitcoin and Ethereum are starting to recover. However, as geopolitical tensions continue to escalate, it remains uncertain whether this renewed momentum can be sustained.
Bitcoin price recovers after US-Israel war causes crash
Geopolitical shockwaves roiled global financial markets last weekend joint US-Israeli military operation against Iran sent Bitcoin into a sharp but short decline, wiping out millions of dollars in long positions before making a partial recovery. Particularly BTC fell to almost $63,000 last night after coordinated attacks on Iranian military targets.
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Within 45 minutes of Israel launching its attack, Bitcoin lost $2,500 in value, while more than $200 million in long positions were liquidated within an hour. The broader crypto market was trading at around $72 billion wiped out amidst the chaos. The sell-off was swift and severe, with major currency players like Binance, Coinbase and trading firm Winternute unload more than $3.5 billion worth of Bitcoin in 20 minutes. This put even more downward pressure on the already shrinking and volatile market.
Despite the carnage, Bitcoin has since climbed back above $66,000, according to CoinMarketCap data, although volatility remains high. the Middle East conflict shows no signs of immediate resolution.
Market analysts were quick to explain the technical reasons behind BTC’s price drop. One expert noted that Bitcoin crashed for a reason. She explained that because it was the most accessible, highest volume asset traded 24 hours a day, it had significant weekend exposure fear and panic selling compared to other major asset classes.
Ethereum price recovers after massive sell-off
In addition to Bitcoin, Ethereum also took a hit after news of the war between the US and Israel. ETH decreased about 10% within just one hour of the news breaking, sending it below $1,900 and erasing any gains it made when it briefly topped $2,000 last week. At its lows, Ethereum fell to around $1,850 before recovering above $1,950.
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It was striking that the crash was caused sharply decreases in the Ethereum derivatives markets, with millions of dollars in liquidations. A large percentage of these liquidations came from long positions, indicating that traders who had bet on Ethereum’s rise were hit the hardest.
In the broader context, the Ethereum price was already experienced a relapsemeaning the geopolitical shock had exacerbated an already painful downtrend for ETH holders. In addition to Ethereum, there are also other altcoins, such as XRP had a major sell-off as geopolitical tensions increased.
Featured image from Pixabay, chart from Tradingview.com