Analysts believe Bitcoin is likely to recover after a significant drop due to geopolitical tensions in the Middle East.
The threat of regional wars in the Middle East is escalating, and the crypto market is feeling pressured. On Friday, June 13, Bitcoin (BTC) fell to its daily low of $102,822 as Israel generated risk-off sentiment in the marketplace on an early morning strike in Iran.
Bitcoin fell due to rising tensions, but crude oil rose 14%. This is a typical trend in the Middle East crisis. Gold also rose 1.74% per ounce to $3,438.36. Still, analysts believe the crypto market may bounce back soon, either with exemptions or with broader Bitcoin narrative changes.
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Redstone co-founder and chief operating officer Marcin Kazmierczak said the attack and subsequent market sales evacuated traders. He pointed to a long position of $427.84 million in long positions that were liquidated across Bitcoin and Ethereum (ETH) futures.
“Bitcoin fell from 5% to $102,900, below the psychologically significant $103,000 level. Ethereum also dropped by up to 7.6% at its worst,” Kazmierczak sent to Crypto.News.
Still, he emphasized that similar incidents in the past have produced “temporary shifts” and often continue to rebound prices. The April 2024 strike led to a similar sale, which reversed after tensions eased.
“These moments proved to be a great opportunity for purchase,” said Kazmiertzak. “However, the current situation has a higher interest given that Israel is directly targeting Iran’s nuclear program and vows to continue its operations indefinitely.”
In any case, Kazmierczak believes that escalation of the conflict will hurt risky assets, including Bitcoin. He explained that recovery depends on how long it takes for the tension to sink.
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Bitunix analysts suggest that investors could escape to Bitcoin
Bitunix analysts take a different view. They agree that risky assets are vulnerable to the Middle East conflict, but believe that Bitcoin may benefit. Specifically, investors may escape to Bitcoin as a safe haven.
“The Israeli-Iran conflict is driving the demand for risk aversion, and short-term geopolitical conflict risk aversion capital could flow into the cryptocurrency market. As geopolitical conflicts continue to rise, we cannot rule out the possibility that Bitcoin will challenge its $110,350 fuel-based target.
Bitunix analysts are wary of emotional trading and advise traders to monitor the US stance on Iran. For now, the US is keeping its distance from the attack, but has preemptively relocated several troops from bases near Iran.
read more: When Israel launches an attack on Iran, Bitcoin crashes, but the chart saw it come first
