After Iran attacked Israel, Bitcoin fell hard
In the early morning of April 14, local time, Iran launched a large-scale attack on Israel itself, the situation in the Middle East escalated suddenly, cryptocurrencies dived in response, and Bitcoin fell by more than $6,000, plummeting 8% in the day, and then rebounded slightly.
The market once described Bitcoin as "digital gold", but judging by recent trends, the safe-haven properties of this asset seem to be gone.
Bitcoin plunged 8% in 24 hours, the biggest drop since March 2023, and narrowed its losses as of press time, trading at around $63,900. Bitcoin's sharp drop dragged down cryptocurrencies, with Ethereum falling more than 11%, Dogecoin falling more than 22%, and SOL falling more than 23%.
CoinGlass data shows that in the past 24 hours, a total of 244,500 people in the virtual currency market have liquidated, and the total liquidation has reached $930 million.
"Whether the crypto sell-off continues or not may depend on further escalation of the situation," said Zaheer Ebtikar, founder of the crypto fund Split Capital. ”
The escalation of the geopolitical situation in the Middle East has affected the performance of traditional financial markets and stimulated the rise of safe-haven assets such as the US dollar, crude oil, and US bonds. On Friday (April 12), the dollar index rose 0.7% to 106.0228, once again updating a new high since November last year. This week, the U.S. dollar index rose 1.65%, its biggest weekly gain in more than a year and a half.
About $1.5 billion of leveraged trading on bullish cryptocurrencies was liquidated on Friday and Saturday, one of the worst two-day liquidations in half a year, according to Coinglass, causing digital asset prices to plummet. The frenzied interest of investors in the cryptocurrency circle once pushed the price of bitcoin to an all-time high of $73,798, but many buyers who have gained a lot seem to be taking profits as soon as possible. At present, bitcoin has retreated more than $10,000 from the aforementioned all-time high.
Ebtikar said that the cryptocurrency market has experienced a significant decline over the past three days, resulting in many leveraged investors being liquidated, which has further exacerbated the market's selling pressure and price decline.
At present, the net inflow of Bitcoin spot ETF funds has become an important factor affecting the trend of Bitcoin and even the entire virtual market. According to Farside Investors, since the launch of the spot Bitcoin ETF in January, Grayscale GBTC has seen a net flow of more than $16.2 billion.
Daily outflows from Grayscale GBTC have fluctuated between $75 million and $300 million since April, with GBTC recording a large outflow of $767 million this week, resulting in negative inflows into spot Bitcoin ETFs overall.
According to media reports, a blockbuster event in the virtual currency market is expected to occur around April 20 - the "halving" of bitcoin, which has attracted the attention of investors, because it will be directly related to the supply and demand of bitcoin.
A Bitcoin "halving" event is the halving of the reward for producing a new block, which occurs approximately every four years. The exact timing depends on the speed of block generation on the Bitcoin network, which will reduce the supply of Bitcoin. The halving of the block reward means that it takes longer for all bitcoins to enter circulation.
Historically, "halving" usually drives prices up, but given that Bitcoin has recently hit a record high, the market has doubts about whether this "halving" event can push Bitcoin up, and some analysts pointed out that the difference between the current round of Bitcoin and the previous one is that the previous cryptocurrency bull market was after the 'halving', but this time it was before the halving, so this round of the market may come out of a different way than the previous ones.