The crypto market experienced a sharp drop after the escalating conflict in the Middle East and the Iranian attack on Israel. On Saturday night, global markets experienced a severe shock that caused the value of most cryptocurrencies to drop by around 10%.
Bitcoin fell $10,000 from $73,798, causing panic in the crypto market. The price fell to a low of $60,660. Investors liquidated stakes in short and long positions totaling $2 billion ($500,000 and $1.5 billion, respectively).
However, crypto assets began to recover within hours of the panic, recouping 2-4% of their losses. As of Monday, April 15, the cryptocurrency market has made a remarkable recovery.
This rapid recovery underscores the resilience of the cryptocurrency market and its ability to withstand unexpected global events.
According to BeInCrypto, approximately $962.40 million was lost during the market pullback. Fears of escalating tensions triggered a sharp drop in BTC.
Crypto analyst Ash Crypto attributed this to fears of escalating wars and rising prices for oil, gold, and other commodities. These factors could cause inflation to rise, making interest rate cuts by central banks less likely.
This sets the stage for bearish developments for both stocks and crypto assets, Ash Crypto said. "As soon as BTC and other cryptocurrencies started to fall, traders started to liquidate open positions with high leverage, triggering even stronger forced selling, similar to the situation under COVID-19 in 2020 and the start of the Russian invasion of Ukraine."
Loading...
However, a massive crisis was avoided, and Bitcoin and altcoins recovered quickly.
At the time of writing, Bitcoin was worth $66,261, up 2.7% overnight. ETH and Solana saw even bigger gains of 7% and 12.8%, respectively.
Mike Novogratz, CEO of Galaxy Digital, commented on the crypto market's recovery from the sell-off: "Wars cost $$$ ... BTC will resume its upward trajectory after risk mitigation." Novogratz hoped that a major regional conflict could be averted, which would reassure markets that like stability.
Loading...
Even with the events of this weekend, Bitcoin has maintained support at the $60,000 level. Ash Crypto stated, "BTC is now trading with strong support at the $60,000 level. If the $60,000 level does not hold, there is still a strong support level at $56,000-58,000 where most of the new whales (ETF buyers) bought their BTC."
Further reading: Analyst warns of sideways movement in BTC price after halving