October is historically one of the most bullish months for Bitcoin, along with February. For this reason it has earned the nickname ‘uptober’ (a play on words in English that can be translated as “bullish October”).
The following graph, taken from the platform CoinGlassshows that, since 2013, bitcoin had 9 positive Octobers and only 2 slightly negative Octobers:
Monthly returns for the price of bitcoin since 2013. Source: CoinGlass.
For this October that has just begun, As CriptoNoticias has reported, the expectations They are optimistic and elevated. There are those who even hope that bitcoin will set new all-time highs this month.
And this is not just for statistical reasons, but bitcoin has its own foundations to shine. Among them is growing institutional and corporate adoption and the “effect halving» which — following historical patterns — should begin to take effect this month.
Furthermore, there is a macroeconomic context that favors the rise of volatile assets.
But, when everything seemed to be going well for bitcoin, something just got in the way: a war.
In the current context of the Middle East, Tension between Israel and Iran has reached a new critical level. Iran today, October 1, launched a series of ballistic missiles toward Israel in retaliation for recent Israeli attacks against Iran’s allies, Hezbollah, in southern Lebanon.
According to inform Reuters, alarms sounded throughout Israel, as citizens took refuge in safe spaces. Although the offensive was large-scale, with almost 20 missiles fired, Israeli air defenses managed to intercept many of them, minimizing the impact on its territory.
This attack marks a significant escalation in regional conflictespecially after Israel also launched limited incursions into Lebanese territory.
Internationally, leaders of several countries, including the United States and the United Kingdom, have expressed concern about the potential for further escalation of the conflict. US President Joe Biden has reaffirmed his country’s support for Israel’s defense, while several countries have suspended flights in the region for security reasons.
The Iranian government, for its part, has made clear that it is prepared for an eventual Israeli military response, and warned that any retaliation will be met with an even more severe counterattack. This has raised fears of a broader conflict that could affect the entire region.
Why is the price of bitcoin falling?
As for the Ethereum-moneda-nacional-calculadora/” target=”_blank” rel=”noreferrer noopener”>bitcoin pricethe immediate impact of the geopolitical situation has not taken long to be felt. Although expectations were very positive at the beginning of October, BTC has been affected by international uncertainty, approaching $60,000 at the time of this writing.
Bitcoin price in the last week. Fountain: TradingView.
This behavior is not unusual in situations of global tension, where investors tend to flee from assets considered more volatileseeking refuge in instruments considered safer, such as gold or Treasury bonds.
For example, in 2022, CriptoNoticias showed that the price of bitcoin was being affected due to the escalation of the war between Russia and Ukraine.
Also, in April of this year, the digital currency saw falls in its price due to growing tension in the Middle Eastwhich currently reaches an even greater scale.
Some readers might wonder why bitcoin, a decentralized digital asset that seeks to be an alternative to the traditional financial system, is negatively impacted by global conflicts such as those mentioned here?
It is an interesting question that deserves to be answered. Bitcoin, although increasingly seen as a store of value, continues to suffer massive sell-offs in times of high uncertainty, as many investors prefer to reduce their exposure to the risk of volatile assets until the situation is clearer.
However, based on past experiences we can consider this drop to be temporary (and could even be considered a good purchase opportunity). At various times of previous geopolitical tensions, bitcoin has initially shown a negative reaction, but has managed to recover and continue its upward path quickly (even before the landscape stabilizes or a solution to the international conflict is reached).
Beyond short-term fluctuations, bitcoin has proven to be a resilient long-term asset. In situations of chaos and uncertainty, traditional stores of value, such as gold, tend to gain prominence, and bitcoin follows a similar path.
Historical bitcoin price chart. Source: TradingView.
As investors seek to protect their capital against potential economic crises or the devaluation of fiat currencies, bitcoin may be favored, especially due to its decentralized nature and limited supply.
For all this, by October 2024, there is still hope to see a bullish bitcoin. The injection of liquidity that results in the drops in interest rates of major financial powers could well turn into greater investment in bitcoin, gold and cryptocurrencies.
Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of CriptoNoticias. The author’s opinion is for informational purposes and under no circumstances constitutes an investment recommendation or financial advice.
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