(Bloomberg) -- Bitcoin speculators banking on a seasonal October meltup face an early reality check as deepening tension in the Middle East drives a bout of caution across global markets.

Most Read from Bloomberg

• A 7,000-Year-Old City Emerges as a Haven from Dubai’s Sky-High Rents

• Gang Violence Is Moving to the Amazon’s Fast-Growing Cities

• A Housing Crisis Brews in Rwanda’s Capital City

• New Rowhouses in London That Offer a Bridge to the 19th Century

• Climate Migrants Stand to Overwhelm World’s Megacities

The digital asset fell the most in almost a month on Tuesday after Iran fired about 200 ballistic missiles at Israel in a sharp but brief escalation of hostilities between the two adversaries. The token steadied around $61,000 in Asian trading on Wednesday amid mixed performance in the wider crypto market.

Bitcoin has shed about 4% in the first two days of October, a contrast with its average 20% climb over the month as a whole in the past decade, according to data compiled by Bloomberg. That seasonal cue had some traders anticipating a lift past March’s record high of $73,798, until arguably the biggest geopolitical fault-line in global markets poured some cold water on the optimists.

Sean McNulty, director of trading at liquidity provider Arbelos Markets, argued that the selloff is a “momentary setback” given that the Federal Reserve has begun cutting interest rates. The government that emerges after November’s US presidential election is also likely to be friendlier toward crypto, he said.

“The seasonal trend of October being the best month for Bitcoin is alive and well,” McNulty added.

For now, markets are on alert for intensifying conflict as they parse Israeli Prime Minister Benjamin Netanyahu’s vow to retaliate against Iran’s strikes. US equity futures wavered Wednesday, while oil prices rose on supply fears.

Digital assets of late have moved more in tandem with stocks, indicating macroeconomic drivers like the Fed monetary policy outlook are key for Bitcoin at the moment. A 50-day correlation coefficient for a gauge of the top 100 digital tokens and MSCI Inc.’s global equity index is at 0.65, the highest since 2022, according to data compiled by Bloomberg. A reading of 1 indicates assets are moving in lockstep, while minus 1 signals an inverse tie.

Most Read from Bloomberg Businessweek

• The Great €3 Billion Shipping Container Heist

• Investors Hot on India Shrug Off Adani Short Seller Attack

• Sports Betting Apps Are Even More Toxic Than You Thought

• Military Veterans Help Plug Worker Shortages at EV, Battery Plants Sprouting Up in the US

• The Presidential Election Isn’t Stopping International Students From Coming to America

©2024 Bloomberg L.P.