First: The main driver of events - political tensions (the main factor)
* What happened? News of an Israeli attack on Iran is the direct and obvious cause of the collapse we've witnessed. This event sent entire global markets into a "risk-off" mode.
* How does this affect? During times of war and major tensions, large investors and institutions withdraw their funds from "high-risk" assets (such as cryptocurrencies and technology stocks) and resort to "safe havens" (such as the US dollar, gold, and government bonds).
* The result: a sudden, mass sell-off based not on technical analysis of the currency itself, but rather on fear of the unknown future. This explains the sharp, vertical decline.
Second: The liquidity situation in the market (technical/internal factor)
* What happened? The sharp decline led to what's called a "long squeeze." Simply put, anyone who had been betting on a bullish price using leverage was forced to sell at a loss when the price fell. This forced selling increased selling pressure and led to a faster and deeper decline.
* Where is the liquidity now?
* Bottom: There is still liquidity (stop-loss and buy orders) below today's lows. If negative news continues, the market may attempt to "catch" this liquidity.
* Top: After this drop, a large amount of liquidity accumulated at the top (stop-loss orders for short bettors). Any positive and surprising news (such as an announcement of a truce) could trigger a short squeeze and a rapid and explosive rise.
* Conclusion: The market is now very volatile. The liquidity that supported prices has evaporated, and the market is waiting to see where things will settle down.
Future expectations based on the above
1. In the near term (the next few days to two weeks)
* Forecast: Neutral to negative with very sharp fluctuations.
* Likely scenario: The market will remain hostage to political news. We expect sideways volatility with sharp ups and downs based on each new piece of news.
* In case of calm: We may witness a strong rebound and an attempt to regain some of the lost price levels, but it will be strong resistance.
* In case of escalation: It is very likely that we will witness another downward wave to break the recent lows.
* Tip: This is the riskiest time to trade or make decisions. Waiting and watching is the only logical option.
2. Medium term (the next few weeks to 3 months)
* Forecast: Neutral with a possibility of a recovery beginning.
* Likely scenario: The market will begin to absorb the political shock and assess its magnitude. Focus will gradually return to economic factors (inflation data, Fed interest rate decisions, etc.).
* If the political crisis doesn't escalate into a full-blown war, and if economic factors remain positive, the market is likely to begin building a true bottom and establish a new, slower upward trend. This is the stage at which a cautious DCA entry plan may be initiated.
3. Long term (6 months or more)
* Forecast: Bullish.
* Possible scenario: Throughout history, financial markets have proven their ability to weather geopolitical shocks. The fundamental reasons supporting the crypto market's rise in this cycle have not changed:
* The effect of Bitcoin halving, which reduces the new supply.
* Institutional access via exchange-traded funds (ETFs).
* Continuous technological development in networks.
* Looking at the big picture, this violent decline may - in time - be considered just a great buying opportunity or a "sale" within a larger overall uptrend.
Conclusion
You are now experiencing firsthand how fear and news can dominate the market and temporarily override all technical analysis. Your current strategy (wait, see, stick to a stop-loss, and don't consolidate) is optimal for dealing with this complex situation. Don't try to predict the bottom; wait for the market to confirm it.
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