«The direction of the price of bitcoin now lies in geopolitics»

Foto del autor


Key facts: Markets are expectant of the development of the conflict in Israel. An Israeli attack on Iran would force a significant downward movement, the analyst warns. Three days after Iran's attack on Israel, markets continue to decline and bitcoin (BTC) is no exception. “They quote the possible transition from a military conflict to a regional war,” said Colombian analyst and investor Juan Rodríguez. The specialist Explain that a regional war would cause cuts or restrictions in the supply of oil. This would lead to higher US interest rates and an aggressive rise in inflation. For this reason, he points out that it would imply less money in the economy, which leads to the closure of investors' operations in the markets. Understanding this scenario, Rodríguez warns in his most recent video that “the direction of the price of bitcoin at this moment is determined by geopolitics.” Currently, the digital currency is trading slightly above the low of $60,600 it hit following the Iran attack, as seen below.

Bitcoin price in the last three days. Source: TradingView. “If Israel confirms that it is going to attack Iran, that would force a second important downward movement,” the analyst predicts. If the attack is launched, it projects that bitcoin will return to prices close to $60,000 or, depending on the magnitude, retreat to lower levels, which you see as most likely. In addition, he adds that it would be necessary to see what response Iran comes out with, since that could aggravate the conflict by generating disturbances in the markets. What has mitigated the situation, he indicates, is that the United States would not support Israel's counterattack. But, in any case, he considers that “the markets are going to suffer”, since it represents a retaliation to the macroeconomic sphere. “Bitcoin is not saved,” he said. Although, he made the reservation that, If Israel can be dissuaded from attacking, bitcoin may not drop below $60,000 support. The market has maintained this level as a minimum since the currency reached a new all-time high (ATH) at $73,700 a month ago. Therefore, he warns that, depending on how the conflict continues, it remains to be seen if USD 60,000 is the floor of this correction or if it will go lower.

Geopolitics accelerated the expected decline for bitcoin, says Rodríguez

Rodríguez clarifies that, after the strong bullish streak that bitcoin had to its historical maximum, he anticipated a period of correction. He maintains that this is like a profit-taking scenario around the halving scheduled for next week, which has been accelerated by the geopolitical context. For this reason, despite the situation, does not rule out for the moment its bullish projection in the medium and long term for bitcoin. In part, this is due to the halving, an event that, as BitcoinDynamic has explained, reduces the issuance of the currency every approximately four years, causing less BTC to be put into circulation.