1.
Escalating geopolitical tensions in the Middle East
• Recent escalations between Israel and Iran have heightened investor fears of a shift towards a broader conflict, prompting them towards safe assets like gold and bonds, and pulling them away from high-risk assets like cryptocurrencies.
• This flight from risk has led to sharp sales and losses in the crypto market over the past two days.
2.
Concerns about the U.S. Federal Reserve's decision
• Markets today are closely awaiting the results of the Federal Reserve (FOMC) meeting. Keeping interest rates frozen is essential to preserve high-risk assets, while raising them or reducing future signals for tightening monetary policy could lead to additional pressures.
• The spread of uncertainty regarding the timing and options of the Federal Reserve weighs heavily on the market.
3.
Technical correction and previous gains
• After a strong surge since May (with gains of 50–60%), a natural correction phase of 8–10% occurred as part of the reassessment and profit-taking.
• Technical factors such as the liquidation of future positions exceeding $1 billion (long position liquidation) played a significant role.
📈 Forecasts and Recommendations
• In the short term: Geopolitical tensions and the impending Federal decision may continue to create strong volatility.
• In the medium to long term: If conditions stabilize, the market will likely see a gradual recovery—some analyses suggest a rebound opportunity of 20–25% after corrections.
In short, the recent market downturn is attributed to a convergence of external factors: rising tensions in the Middle East, coupled with the uncertainty surrounding Federal policies, along with a technical correction phase following significant gains.
