- Many cryptocurrencies have plunged after Iran launched an attack on Israel.
- Bitcoin prices have crashed to a low of $60,920, and Ethereum has tumbled to a low of $2,862.
- Analysts have warned of further decline but remain optimistic, saying drops like this are normal before the halving.
The cryptocurrency market experienced a significant downturn on April 13, with Bitcoin (BTC) plummeting to as low as $60,600. This sudden price drop coincided with a sharp escalation in tensions between Iran and Israel, with reports suggesting the first-ever direct attack by Iran on Israeli soil.
BTC Falls on Geopolitical News
The news triggered a sell-off across the board, with Ethereum (ETH), the second-largest cryptocurrency, also suffering heavy losses. Its price crashed to $2,852, mirroring the broader market sentiment. While some price recovery occurred shortly after, the volatility highlighted the sensitivity of cryptocurrencies to global events.
Analysts cited the liquidations, which reached a staggering $711 million within four hours, as evidence of the market panic triggered by the geopolitical turmoil.
However, some analysts remained optimistic. A cryptocurrency analyst, Benjamin Cowen downplayed the dip’s significance, suggesting it represented a normal market correction. He cautioned, however, that further declines could be on the horizon, with Bitcoin potentially reaching $50,000 if historical trends repeat themselves.
Technical indicators from the 4-hour BTC/USD chart supported Cowen’s concerns. The Moving Average Convergence Divergence (MACD) remained negative, indicating a bearish trend. Additionally, the 12-period Exponential Moving Average (EMA) crossing below the 26-period EMA signaled that sellers were currently in control despite the brief price rebound.
This confluence of technical factors suggested that Bitcoin could fall below $64,000 if the selling pressure persists. Looking ahead, analysts outlined potential price trajectories for Bitcoin. If the downward trend continues, the next support level for BTC could be around $63,567.
Conversely, a surge in buying pressure could push the price back towards $67,722. However, the Relative Strength Index (RSI) indicated weak bullish momentum, suggesting a near-term rebound towards $67,000 might be unlikely.
ETH Stuck Between Support and Resistance
Ethereum also faced similar headwinds. The chart revealed an oversold RSI, suggesting the presence of buying pressure. However, the indicator remained well below the 50.00 mark, implying insufficient force to establish a strong bullish trend.
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While increased buying could lead to a short-term rise in ETH price towards $3,275, the Bollinger Bands (BB) further emphasized the oversold territory for the cryptocurrency. Additionally, the BB indicator highlighted heightened volatility around ETH, suggesting the possibility of significant price fluctuations in the coming days.
In a more optimistic scenario, ETH could potentially surge to $3,712. However, the absence of significant buying pressure could stall the price action, with ETH potentially oscillating between $3,080 and $3,275.
On the Flipside
- While technical indicators are considered, they are not always accurate predictors of future price movements, and the market can behave unexpectedly.
- Bitcoin and Ethereum, while highlighted in the article, were not the only cryptocurrencies to drop, as evident from the total market cap of cryptocurrencies falling by 9% before rebounding.
Why This Matters
This sudden price drop due to geopolitical tensions exposes the vulnerability of cryptocurrencies to external events beyond just the digital asset market. The significant sell-off and analyst predictions of further potential decline could dampen investor confidence and trigger a domino effect across the broader cryptocurrency market.
Cryptocurrency markets are feeling the heat as geopolitical tensions rise. This article explores the recent price drops and how they might be connected to global conflicts:
Crypto Market Sheds Billions As Geopolitical Tensions Rise
What exactly is halving, and why are people so hyped about it? This article breaks it down for you:
Bitcoin Halving in 7 Days: What Is It & Why Are People Excited?
