Bitcoin vs World War 3
Iran attacks against Israel overnight, markets are feeling the brunt of this. What should you do with your Bitcoin?
The conflict in the Middle East continues to escalate, with Iran launching missiles at Israel just days after Israel’s attack on Lebanon. Israel has vowed to retaliate, while the United States maintains its strong support for Israel. One can only assume that this conflict will intensify further. As these events unfold, risk-on assets are likely to suffer.
As a result of this overnight development, Bitcoin has dropped another 4%, with other cryptocurrencies experiencing even greater losses. What the industry expected to be ‘Uptober’ has begun with the exact opposite effect. What looked like a breakout to the upside less than a week ago has turned into a bull trap.
When global conflicts arise, risk-on assets tend to decline as investors seek 'safe havens' like gold or even the US dollar. Both gold and the USD have benefited from the overnight events, while the S&P 500 and Nasdaq dropped 0.93% and 1.43%, respectively. Risk-on markets are expected to continue struggling if tensions in the Middle East escalate further. Exercise the utmost caution when considering allocations, as global uncertainty is at a high. This uncertainty could lead to more rotation out of Bitcoin and crypto into 'safer' assets, potentially causing Bitcoin to retest $50k and altcoins to suffer further losses.
Here are some key considerations during such times. Avoid panic selling—use these dips as an opportunity to reload your positions and dollar-cost average (DCA). The key asset to watch is gold, the proven ‘safe haven.’ The question surrounding Bitcoin is whether it will act as 'digital gold' or a risk-on asset. Regardless of how Bitcoin reacts, there is no better time to buy or DCA into Bitcoin than during a dip. For those looking to DCA into altcoins, focus on coins that were strong before the downturn, such as FTM, SEI, and SUI, but remain cautious, as there is a high probability that markets could continue to decline. After taking these steps, remain patient. Those who buy when others are fearful often benefit the most when the market eventually rebounds. Contact your Stormrake broker to take advantage of this opportunity.
Stormrake Spotlight: FANTOM ($0.6765)
Prior to last night’s events, FTM was once again leading the market, reaching a high of $0.76, almost 10% up from our morning note yesterday. FTM dropped due to the overnight developments, but it continues to outperform other currencies, being down only 3% compared to other altcoins, which are down 7% or more. As we cautioned yesterday, there is market uncertainty, and now, there is also global uncertainty, which calls for even more caution when allocating to FTM.
BTC/USD Key Levels and Price Action:
Bitcoin retested the key resistance of $63,800 and even stayed above this level for a few hours before the overnight events triggered a selloff, causing BTC to drop and break through several support levels without much resistance before tapping the current support at $60,100. BTC is now hovering just above this level. Further downward movement is favored, meaning BTC will likely retest this support. If it fails to hold, expect BTC to drop to $57,700.
BTC Total ETF Flows for 1 Oct: $ - 122.9 million
(ETF flow data is sourced from https://farside.co.uk/btc/ and reflects figures at the time of writing.)
ETH/USD Key Levels and Price Action:
As I’ve mentioned in several morning notes, Ethereum tends to follow Bitcoin, and it continues to do so. ETH reached the key support level of $2,556, showing no signs of recovery before continuing to fall below it. The next support level is at $2,171, which will likely be tested if BTC continues to face downward pressure due to the conflict in the Middle East.
ETH Total ETF Flows for 1 Oct: $ - 26.3 million
(ETF flow data is sourced from https://farside.co.uk/eth/ and reflects figures at the time of writing.)
Written by Alexandar Artis
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