Bitcoin Pours $4,000 As Fear Grips Markets Over Middle East Conflict

Bitcoin prices dropped almost $4,000 in less than 24 hours after an Iranian missile attack on Israel in the afternoon on October 1st.

The asset was trading at just over $64,000 on Tuesday, but bottomed out just above $60,000 after the attack.

BTC has since rebounded to around $61,700 during Wednesday morning trading in Asia, but remains up 3% on the day.

No need to panic

Market sentiment has quickly changed from “greed” a few days ago to “fear” today, according to the Bitcoin Fear and Greed Index.

Bitcoin’s Fear and Greed Index is 42: Neutral
Current price: $60,836 pic.twitter.com/gi3cDBB2L6

— Bitcoin Fear and Greed Index (@BitcoinFear) October 2, 2024

However, this is nothing new and panic selling is largely irrational behavior. Some may label Bitcoin as a “safe haven” asset, but it has previously exhibited such behavior during geopolitical tension.

BTC shed more than 13% in the days following Iran’s drone attack on Israel in mid-April.

Conversely, commodities such as gold and crude oil are rising today. Bitcoin pioneer Samson Mow saw the irony in this, posting on X on October 2nd.

Imagine trying to protect yourself from the coming war #Bitcoin to buy paper gold that you can’t move anywhere in case of real war. https://t.co/KX6WDaBJiM

— Samson Mow (@Excellion) October 2, 2024

Analysts don’t seem to be worried, as Bitcoin remains within its limited six-month channel despite this selloff.

Veteran trader Peter Brandt noted that the recent rally did not alter the sequence of lower highs and lower lows.

“Only a close above $71,000 confirmed by a new ATH will indicate that the trend from the November 2022 low remains in place,” he added.

Meanwhile, analyst “IncomeSharks” predicted another drop before things pick up later this month.

#Bitcoin – We’re all making guesses here. If we want to get Pumptober, I think that’s still the likely scenario. Make people think $59,000 is the lowest, but it goes to $57,000. Then people are bearish and sell and we reverse. Back up slowly and end the month in the red and then November in the green. pic.twitter.com/33wAPHswyz

— IncomeSharks (@IncomeSharks) October 1, 2024

‘Rekt Capital’ said that BTC would test support at $59,800 after a pullback from resistance levels within the channel.

Elsewhere on Crypto Markets

The specter of war in the Middle East has shaken the entire crypto market, with total capitalization falling 4.7% on the day, or around $150 billion. It currently stands at $2.26 trillion, according to CoinGecko.

Ethereum fell nearly 8%, down to $2,450, before recovering marginally during Asian trading on Wednesday.

As usual, altcoins were bleeding further, with biggest losses for Dogecoin (DOGE), Toncoin (TON), Avalanche (AVAX), Shiba Inu (SHIB), Chainlink (LINK) and Polkadot (DOT).

In other words, it’s the same old story for crypto and the same panic from those with little conviction in the asset class.

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