Why You Are Wrong: BTC Didn't Fall Because of Iran's Attack
The narrative around BTC's recent drop is being heavily tied to the escalating tensions in the Middle East, specifically Iran's ballistic missile attacks on Israel. While itâs tempting to pin the blame on such geopolitical events, this analysis argues that BTCâs decline was already in motion well before this incident. Letâs break down the reasons why this drop was inevitable, regardless of the political situation.
1. Pattern Breakdown
Looking at the technical indicators, BTC has been trading within a descending channel for several weeks now. In the image, we see BTC struggling to break above the channel, only to be rejected at the upper trendline. The resistance was clear, and BTC's price action suggests that the recent surge was just another lower high within this bearish trend.
The Moving Averages (MAs) further support this argument:
MA(7): 64,042 is well above the current price, suggesting that the short-term trend has been bearish.
MA(25): 61,482 is offering minimal support, and the price is currently hovering around this level, indicating indecision but leaning bearish.
The channel's upper boundary has repeatedly rejected BTCâs price. Even before the recent geopolitical news, BTC was due for a breakdown towards the lower end of the channel, which, if extended, points to a potential support level around $50,000.
2. Geopolitical Events Don't Drive Long-Term Trends
Itâs a common misconception that sudden geopolitical events, such as military conflicts, can single-handedly crash markets. While such events can create short-term volatility, they rarely drive long-term trends in assets like Bitcoin. In fact, Bitcoin often acts as a hedge against such uncertainties, and while there may be panic-selling initially, the price typically stabilizes.
In this case, while Iranâs missile attack may have contributed to momentary panic and a sell-off, itâs essential to remember that BTC was already showing weakness. The attack may have added some temporary pressure, but BTCâs technical picture tells a different storyâone of a downtrend that has been building for days, even weeks.
3. The "Uptober" Myth
The term âUptoberâ refers to the historical trend of BTC performing well in October. This year, however, has bucked that trend. We entered October with several bearish days, and any upward momentum has been quickly faded. The idea that BTC is invincible in October is flawed, and this year's price action is proof of that. The bulls failed to break critical resistance levels, and the market sentiment remains cautious.
What weâre witnessing isnât unusual. Cryptocurrencies, especially BTC, are known for cyclical behavior, and the current downtrend fits perfectly within this pattern.
4. Possible Next Steps: $50,000 Support
Given the current price action, BTC may retest the lower end of the descending channel. If it fails to hold support at this level, we could see BTC drop to $50,000, which aligns with the next major support zone. Historically, BTC has found strong buying interest at such psychological levels, and $50,000 may act as a floor for this current downtrend.
However, this doesnât mean an immediate rebound. BTC could consolidate for a while in this range before making its next significant move.
Conclusion
Itâs easy to attribute BTCâs decline to Iran's attacks on Israel, but thatâs not the whole story. The charts have been signaling a downtrend for a while, with BTC consistently making lower highs and failing to break resistance levels. While geopolitical news may have exacerbated the drop, it wasn't the primary cause. Bitcoin was bound for a correction, and all signs point to further downside unless key levels are reclaimed.
Geopolitical tension or not, BTCâs price action speaks louder than any headlines. Keep an eye on the technicals, and donât be swayed by emotional market narratives.
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