As tension in the Middle East continues to grow following reports of the IDF pounding the city center in Beirut, the crypto market has continued to shrink, losing nearly 3% of its market capitalization in the last 24 hours.
Bitcoin, which struggled to break the stiff resistance at $65k last weekend, is now down by 7.39% week-on-week. The leading cryptocurrency has shed 2.5% in the last 24 hours.
Ethereum, on the other hand, has fared worse, losing 5.73% in 24 hours — more than double what BTC lost during the same period.
At press time, BTC was trading at $60,105, and Ethereum at $2,318.
What Happens If the Situation in the Middle East Worsens?
There is uncertainty as the situation in the Middle East worsens by the hour, and analysts have mixed opinions about how it could impact the crypto market.
For instance, market intelligence company Santiment made an interesting observation. Santiment posted on X that after conflicts such as Russia vs. Ukraine and Hamas’ attack on Israel on October 7th last year, Bitcoin and the overall crypto market initially shed value but then rebounded.
However, Santiment’s observation may not hold this time. If the conflict in the Middle East escalates, we could see sharp selling, which could push BTC prices further down, and other cryptocurrencies would likely follow.
Important levels for Bitcoin are $59k and then $57k. While BTC has some support at $59k, the stronger support is at $57k. If the Middle East tensions escalate and BTC drops below $57k, it might slip further to the $52k level.
At this point, the chances of Bitcoin reaching a new all-time high in October or the so-called “Uptober” are minimal. According to the latest reports, British Airways has suspended all flights to Tel Aviv until the end of the month, indicating the seriousness of the situation.
Moreover, U.S. President Biden released a statement saying he was discussing possible Israeli strikes on Iranian oil sites, which will only add to the worsening situation. Any U.S. involvement that could trigger a larger war in the region would drastically impact crypto markets.
With mounting fear, it wouldn’t be surprising if BTC struggles to hold above $57k in the coming week.
