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Bitcoin Price Dips as Israel-Iran Tension Affects Stocks in the Middle East

Last Updated April 15, 2024 1:35 PM
Shraddha Sharma
Last Updated April 15, 2024 1:35 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • Military actions between Israel and Iran have escalated fears in global stock and crypto markets.
  • Bitcoin price dropped amid tensions but dominance reached its highest level after 2021.
  • Bitcoin trading volume shows a fall on the daily charts, signaling a decrease in market activity.

Bitcoin experienced notable weakness as Middle Eastern tensions led to volatility in the stock market. The global stock market, particularly the Asia-Pacific market, declined due to the potential for higher oil prices. However, while the stock market is recovering, Bitcoin trading volume is seeing a fall. On the other hand, though, BTC dominance has hit its highest level in three years.

Bitcoin’s Trading Volume and Price Trends

The Middle Eastern tensions led to a ripple effect across global stock markets. Iran’s military action against Israel reportedly involved over 300 missiles and drones. With new fears of an Israel retaliation, there is investor anxiety. Bloomberg’s EMEA index is currently down at least 1%. Meanwhile, the global stock market, particularly the Asia Pacific region, fell on the potential of oil price rise. A rise in oil prices is also generally linked to a fall in Bitcoin price.

Bitcoin‘s price has tumbled 10% after reaching its all-time high of over $73,700 in mid-March. CoinGecko data revealed that BTC is still performing slightly better than the overall crypto market despite the daily trading volume dropping by 35%. It was reported that crypto lost $200 billion in market cap minutes after the attack.

A fall in trading activity could signal caution on the back of Israel-Iran tensions which escalated on April 13 and 14. At the time of writing (April 15 2024), the response of the global stock market was mixed. 

BTC Dominance at 3-Year High

The decline in Bitcoin’s price is close to 8% in the week before April 15. Meanwhile, Bitcoin dominance reached its highest level above 55% since April 2021. BTC dominance rose 2% in the last week as per TradingView  charts.

According to CoinShares data , there were minor outflows from digital asset investment products totaling $126 million in the last week. While the report points at hesitancy among investors, this could deepen as a direct consequence of regional uncertainty impacting the financial markets.

Reports noted  Israel’s strong response to the attacks, promising to “exact a price” from Iran. It suggests further escalations which could continue to disturb crypto while the stock market noted some recovery at the time of writing.

Crypto Community Gets Against Biden

Chris Burniske, partner at Placeholder, hinted at positive outcomes for cryptocurrencies should the situation between Israel and Iran de-escalate. He suggests that reducing tensions could lead to a “leverage reset” and a “weak-hand flush,” setting up a favorable environment ahead of Bitcoin halving.

Meanwhile, some crypto community members have started a conversation against US President Joe Biden. Crypto Lawyer called  Biden the “most anti-Israel President.” The US has assured of non-participation in offensive actions against Iran. In response, the Twitter has started to praise Trump, who recently said that the attack could have been defused if he were the President.

What is Next?

As the situation in Israel and Iran unfolded, financial market stability took a hit before clocking some recovery. Meanwhile, political sentiments continue to evolve in the US based on its support of the Israeli ally.

Bitcoin price could tumble if the tensions escalate but recovery is anticipated if the situation defuses. But the military actions have led to increased market volatility and investors should remain vigilant and prepared for fluctuations in both the crypto and broader financial markets.

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