June 13 marks the beginning of the escalation of tension in the Middle East and the drop in cryptocurrency prices. That day, Israel launched "Operation Lion's Rising" and airstrikes on Iranian nuclear facilities. Iran initiated a counterattack and even threatened to close the Strait of Hormuz, triggering fears of a crisis in the oil market.
With this, the cryptocurrency market collapsed, losing more than a billion dollars in liquidity in a single day. The continuation of the war between Israel and Iran, and especially the involvement of the United States, intensified the decline of the digital asset. On June 22, the United States launched an airstrike against Iran's nuclear base, and Iran responded with a missile attack on Al-Udeid airbase in Qatar.
The ceasefire agreement occurred after these events, and the cryptocurrency market flourished. The price of Bitcoin regained the bullish trend up to $107,000, Ethereum surged to $2,500, and Solana reached $145. The same happened with the rest of the market.
Cryptocurrencies experience a surge after major fear events. Historical data shows multiple cases of strong recovery of Bitcoin and altcoins after significant drops.
The events include fears of FTX liquidation and geopolitical tension, and on each occasion, cryptocurrency prices soared weeks or months after the crash. Panic selling represents the market bottom, which investors interpret as a buying opportunity.
It is noteworthy that whale activity has been relatively high in the case of digital assets. Bitcoin and Ethereum ETF inflows are at their peak, as buyers are actively investing in them. Additionally, many other institutions, such as Sequans Communications, are launching Bitcoin Treasury.
Other companies, such as MicroStrategy and Metaplent, continue to buy Bitcoin. Moreover, regulatory advancements are on the horizon with the arrival of the Genius Act in the House of Representatives. Therefore, not only the war between the United States, Israel, and Iran, but also other factors contribute to the current increase. This could also favor a rise in the future, opening the possibility of a rally in cryptocurrency prices.
Individually, Solana, Ethereum, and SEI show strong rebounds after the drop. Bitcoin is only 5% away from its all-time high. Additionally, the foreign exchange reserve fell to its lowest in 10 years, demonstrating the great confidence of investors in new rises and their desire to maintain the position.
The continuation of the bullish momentum could create conditions similar to a bull market. However, geopolitical and macroeconomic barriers persist. Upcoming updates could change the trajectory, making continuous analysis essential.
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