Bitcoin’s price momentarily exceeded $65,000 as the market reacted to seemingly reducing geopolitical tensions between Israel and Iran.
During the past week, the crypto industry slumped amid escalating tensions in the Middle East and plunged again in the early hours as news broke of Israel’s retaliation on Iran. However, following the muted response from Iran and tempered action from Israel, this morning saw a turnaround as the broader crypto market rose by more than 4%.
‘Safe haven’
During early Asian trading hours, Bitcoin briefly dipped below $60,000 but swiftly rebounded as Iranian authorities downplayed the severity of the attack.
According to CryptoSlate’s data, the leading crypto surged by 5% to approximately $64,450 as of press time.
Market analysts attribute the market’s resilience to Israel’s measured response and Iran’s attempts to de-escalate tensions. Both nations are reluctant to engage in a full-scale conflict, easing concerns of a Gulf War resurgence.
Renowned Bitcoin analyst Tuur Demeester commented on the escalating Iran-Israel tensions, noting a nearly 4% increase in oil prices for the day. Demeester maintained that military instability typically drives demand for secure, scarce assets with minimal counterparty risk. In this scenario, he identifies bitcoin, commodities, and gold as viable safe-havens.
Similarly, market analyst Mortensen Bach added:
“We’re in a strong liquidity cycle, which will take risk assets substantially higher. There are no serious arguments out there for a cycle top, and the Israel/Iran events overnight still doesn’t mark the end of this cycle.”
Still, given that Bitcoin dropped immediately following the initial news of Iran’s attack and again as Israel responded, there is also an argument that Bitcoin is now only rebounding due to a potential end to the short-term duel between the nations. Bitcoin may be acting risk-off here rather than behaving as a safe haven.
Less than 100 blocks to halving
Meanwhile, these developments are occurring just as Bitcoin’s halving approaches. The halving event, which halves miners’ rewards every four years, is scheduled for April 20, with fewer than 100 blocks remaining before the event takes effect.
“Bitcoin has shown strong momentum leading up to previous halvings, it has demonstrated even greater growth in the following 360 days. The subsequent halvings resulted in overall increases of 2,819%, 803%, and 707%, indicating promising outcomes for long-term investors in this cycle.”
Meanwhile, some have argued that the halving event could be a “sell the news event in the micro term.”