How Will the Crypto Market React to Israel-Palestine War?
The crypto community is speculating on how Bitcoin (BTC) and altcoins will be affected as Israel declares war against Hamas. Geopolitical crises like war often lead to increased market volatility, with investors shifting away from risky assets like stocks and crypto.
Crypto Analyst Expects Short-Term Volatility
Crypto analyst Miles Deutscher suggests that markets tend to recover quickly from wars and geopolitical shocks, despite initial volatility. Data shows that in 75% of cases, the S&P 500 was positive 12 months after a military event. However, it’s difficult to determine the isolated impact on crypto assets due to the lack of major conflicts in the cryptocurrency market.
Bitcoin’s Volatility and Correlation with S&P 500
Bitcoin is likely to experience volatility in the shorter term along with the S&P 500 due to their correlation. The Bitfinex Alpha report predicts heightened levels of volatility in Bitcoin’s price action. Historical data shows that Bitcoin’s daily volatility remains above the 200-day exponential moving average (EMA).
Bitcoin’s Performance Since the War Started
Since the start of the Israel-Palestine war, Bitcoin has declined by nearly 2%. However, it’s important to note that this data is subject to change as the situation develops.
Hot Take: The Impact of Geopolitical Crises on Crypto
Geopolitical crises like wars can cause short-term volatility in both traditional markets and cryptocurrencies. While initial uncertainty may lead to price fluctuations, historical data suggests that markets tend to recover relatively quickly. It remains to be seen how the Israel-Palestine conflict will specifically affect the crypto market, but investors should be prepared for potential fluctuations in the coming weeks.
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