Bitcoin and the broader cryptocurrency market have seen a sharp drop following the escalation of tensions between Israel and Iran on Tuesday. Bitcoin's price fell by 3.16%, reaching $61,715, while altcoins, led by Ethereum, have plummeted by 5-10%.
After a strong September performance, Bitcoin and altcoins are facing heavy selling pressure as bulls struggled to keep Bitcoin above $65,000. The situation worsened when Iran launched 200 ballistic missiles at Israel, heightening the conflict between the two nations.
Despite Bitcoin's history of 20% gains in October, it's down 4% in the first two days of the month. Sean McNulty, trading director at Arbelos Markets, called this a "momentary setback" and expressed optimism that Bitcoin’s strong October trend remains intact. However, the market remains on high alert as Israeli Prime Minister Netanyahu has vowed to retaliate.
Additionally, Bitcoin ETF outflows surged to $242 million on Tuesday, breaking an eight-day streak of inflows. Some analysts caution that Bitcoin's all-time high may not happen until at least mid-November. Weakness in US PMI data, signaling a shrinking economy, is adding further selling pressure.
Crypto analyst Benjamin Cowen pointed out that after the Fed rate cuts in 2019, Bitcoin initially rallied before dropping to the 100W SMA two months later. If history repeats, Bitcoin's price could correct to $50,000 by mid-November, according to Cowen's analysis.
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