A new day of high tension shook the financial markets this Tuesday, with stocks and cryptocurrencies in the spotlight. The conflict between Iran and Israel is entering its sixth day, and new elements threaten a greater escalation. In this context, volatility was the response of Bitcoin investors as tensions escalated.
When the price of the largest cryptocurrency seemed to consolidate, a sharp collapse occurred following strong statements from Donald Trump. The US president threatened to involve his country in the Persian-Israeli conflict, which generated immediate nervousness in the markets.
Since then, tension has become the main issue facing investors at this moment. And it is not only about the cryptocurrency market: stocks in all exchanges are showing red numbers and investors want nothing to do with the US dollar.
For their part, some assets like gold, oil, and Treasury bond yields improved noticeably. Despite this, the general rule was volatility, which is shaking Bitcoin at the moment of writing this note. According to data from CoinMarketCap, the leading cryptocurrency presents a price of $105,083 per unit. This is a partial recovery after falling to $103,500 this Tuesday.
Will the volatility of Bitcoin's price continue in the coming hours?
The answer to this question depends on external factors to the digital assets market, particularly the development of events in the Middle East. If Iran and Israel manage to reach an agreement in the current conflict, the price of BTC will likely resume its upward trend. Thus, the currency could return to the rally it was experiencing before the attack by Israel on Iran.
On the other hand, in the worst-case scenario, if the United States decides to enter the war on Israel's side, the situation would be enormously negative. A direct conflict could trigger a collapse of financial markets, starting with a surge in oil prices and the domino effect that it generally has on the global economy.
For investors, this is not a situation that can be considered comfortable. Consequently, it should be noted that this is the first time Bitcoin is facing a geopolitical landscape of the current dimensions. For example, the war between Russia and Ukraine, while having a profound impact, does not have as direct consequences as a war in the Middle East.
This means that the stability of global trade is at stake. It is a scenario in which Bitcoin's volatility could reach levels not seen in years.
