Israel and Hamas Conflict Stirs Fears of Short-Term Crypto Market Decline – Coinpedia Fintech News

Renewed tensions between Israel and Hamas have fueled concerns about a potential short-term decline in higher-risk crypto assets like Bitcoin.

Several analysts noted that escalating geopolitical instability often spurs a flight to safety out of volatile assets. This was evident during the early days of Russia’s invasion of Ukraine in 2022.

On Monday, Bitcoin shed 2% alongside drops in equities as oil prices rose amid worries the Middle East turmoil could spread and disrupt trade. Over $100 million in crypto futures liquidations occurred in 24 hours.

Crypto remains resilient despite the dip

However, crypto has so far shown resilience after an initial dip. Analysts point to crypto’s recovery after Ukraine sanctions as evidence it can rebound quickly from geopolitical impacts.

Some traders recommend monitoring energy markets closely to see how Bitcoin may react next. Surging oil prices typically fuel expectations of tighter monetary policy, posing risks to crypto.

While crypto remains sensitive to global conflicts, its newfound maturity suggests that most downward pressure may prove short-lived. Still, the situation highlights crypto’s growing correlation with macroeconomic forces.

Unless tensions escalate severely, analysts don’t expect a significant crypto selloff comparable to March 2020’s pandemic crash. Investors now have experience navigating market turmoil.

Nonetheless, the conflict exemplifies lingering volatility risks for crypto from external events. Traders may need to brace for amplified volatility as the crisis unfolds. 

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