Bitcoin returns to pre-crash levels, reaching $64,000 after a decline caused by geopolitical tensions. Does this rebound herald a bullish recovery or a simple “dead cat bounce”? The evolution of crypto markets remains to be monitored closely.
How are global markets doing in this tense context in the Middle East?
At the start of last week, tensions between Iran and Israel seemed impossible to ease. After the firing of around 200 Iranian missiles on Israeli territory, investors, fearing an escalation of the conflict, panic-sold their assets deemed the riskiest, causing a fall in indices such as the S&P 500, the CAC 40 and cryptocurrencies. .
The price of Bitcoin thus fell by around 6% in the hours following the event, while the price of Ether lost more than 12%, the price of BNB 7%, the price of SOL more than 14%. , and the total capitalization of cryptocurrencies (excluding BTC) almost 10%.
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Since this fall, traditional markets have recovered well, notably with a rebound of the S&P 500 to $5,750, only 0.3% below its historic record reached at the end of September 2024.
In the short term, It was especially the price of gold that we thought would benefit from the situation, while it increased by almost 1% in the following hours before erasing this increase. It is now stabilizing above $2,630.
On the other hand, it is the dollar which has benefited the most from the situation, with its index (DXY) gaining 2.3% since the start of the weekrecovering part of the decline recorded in August.
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Resumption of rise or dead cat bounce for Bitcoin?
The price of Bitcoin also rebounded, even returning to its pre-event levels.
Indeed, after falling to $60,000 the day after the attack, it is up more than 6% since last Thursday and is now moving above $63,500.
Bitcoin price against the dollar
Although it is impossible to predict how the conflict in the Middle East will evolve and its impact on global markets, the short-term rebound remains very positive. After falling to $53,500 in early September, Bitcoin’s recent bullish recovery suggests a possible continuation of the trend.
However, in the event of bad news, the price of BTC could resume its downward trajectory, making this peak near $64,000 a simple “dead cat bounce”a typical chart pattern marking a false rebound before a more pronounced decline.
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The rest of the cryptocurrency market is more reserved, like Ether which remains down 5% since last week. The price of Ether continues to disappoint, underperforming against Bitcoin, without showing any signs of lasting recovery.
While the ETH/BTC ratio had briefly exceeded 0.04, it once again crossed this psychological support on the downside, now trading below 0.039, marking a decline of 5.3% since the previous week.
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Source : TradingView
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First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I just have to share my knowledge and convey the passion I have for Bitcoin. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
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