Geopolitical tensions in the Middle East have impacted Bitcoin and cryptocurrencies, but analysts suggest this may be short-lived.

Geopolitical Events Impacting Cryptocurrency Markets

Recent ballistic missile attacks from Iran against Israel triggered a market selloff on October 1, causing Bitcoin, Ethereum, major altcoins, and the total cryptocurrency market to drop approximately 4%. As a result, Bitcoin traded below $60,500, with analysts from QCP Capital predicting further price declines before a potential rebound.

Short-Term Bearish Trends in Bitcoin

QCP analysts indicated that Bitcoin’s technical analysis suggests short-term bearish price action. Ethereum also slipped below $2,400, and Solana retraced under $137, according to crypto.news price data. Although October is historically a positive month for digital assets, recent market conditions have led to consecutive red days.

We believe this weakness is temporary, given the strong correlation between crypto and U.S. stocks. As U.S. equities recover, crypto is likely to follow. This correlation highlights that macroeconomic factors are currently the main drivers of risk asset prices.

According to QCP’s October 3 note, anticipated rate cuts and strong U.S. labor market data are expected to drive Bitcoin and altcoins to higher prices.

Positive Sentiment from Bitget Analysts

Bitget Research chief analyst Ryan Lee echoed a bullish outlook for Bitcoin in Q4. Lee noted a 16% drop in trading volume as investors closely monitored geopolitical developments and macroeconomic events. Despite the downturn, CryptoQuant data highlights sustained institutional interest in Bitcoin.

Despite the general downturn, institutional investors continue to buy digital currency at a rate on par or higher than the quantity mined daily, according to CryptoQuant. Currently, BTC has maintained support above the $60,000 level and may fluctuate in the $72,000 range. The anticipation for Fed interest rate cuts and market rebound may come from Bitcoin’s historically optimistic Q4s.

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