Crypto prices are under pressure in wake of reports suggesting that Iran has launched a missile attack against Israel, with Bitcoin (BTC) dropping to test $62,000 as markets await further developments.
Iran has attacked Israel in response to the latter’s recent incursion into Lebanon as part of its ongoing military actions against the anti-Israel militant group Hezbollah, an Iran-backed proxy.
The fear is that Iran’s assault on Israel may trigger a full-scale war between the two countries and drag in major powers like the US and Russia, all whilst disrupting Middle Eastern oil flows.
Bitcoin was last down 1.7% on the day and 6.5% versus last week’s highs above $66,000.
Other major crypto prices were nursing even steeper losses, with Ethereum (ETH) down 4% on the day and Solana (SOL) 3.3% on the day, per TradingView exchange data.
Has “Uptober” Already Been Upended?
Tuesday’s bearish market action marks a downbeat start to October for crypto prices.
That might have taken some by surprise, with many market participants preparing for more upside this month.
Indeed, October has historically been the best month of the year for Bitcoin, posting an average gain of 27% since its inception per bitcoinmonthlyreturn.com.
That has led, over the year, to some traders reffering to the month as “Uptober”.
But if a major war breaks out in the Middle East between Israel and Iran, this could trigger further risk off trading conditions.
Further downside in major crypto prices could be imminent and the uptrend since mid-September could quickly break.
However, risks remain tilted towards traders buying the dip.
Geopolitical risks aside, the macro backdrop is looking increasingly bright.
The Fed is easing and the US economy appears to be holding up, although ISM manufacturing dataout on Tuesday was a little weak.
Across the globe, other major central banks (like the PBoC) are also easing, and an improvement in global liquidity conditions should support risk assets and crypto going forward.
Geopolitics might trigger further downside in the short-term, but risks remain firmly tilted to the upside later this quarter.
Bear in mind, the US election is also coming up in just over one month.
Election uncertainty should clear up around the same time as post-BTC halving tailwinds really start to kick in.
Bitcoin could still hit $100,000 by the end of 2024.
Polymarket bettors currently place a 53% chance that Bitcoin hits new all-time highs in 2024.
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