
What Happens to Bitcoin if the U.S. Joins the Iran-Israel War?
The ongoing conflict between Israel and Iran has left many wondering about the potential impact of a United States’ involvement in the situation. As the world watches with bated breath, the cryptocurrency market is equally on edge as it tries to decipher any implications that may arise from such an event.
Bitcoin, specifically, has remained within a tight range of $100K-$110K amid the escalating tensions. This narrow price band could be attributed to the short-term bullish positioning in the market. However, experts are divided on how things will unfold once the U.S. potentially enters the fray.
According to QCP Capital, an escalation of the conflict could result in inflationary pressures, which would negatively impact risk-on assets like Bitcoin. In other words, if the U.S. joins the war, there’s a strong possibility that Bitcoin’s price could drop as investors turn their backs on risk-taking assets and flock to safer investments.
On the flip side, some analysts are of the opinion that Bitcoin will continue to perform well in the short-term due to its perceived status as a hedge against inflation. As it stands, Bitcoin has been exhibiting a strong correlation with equities rather than gold, which could imply that investors see it as a risk-on asset and are not yet prepared to abandon ship.
In terms of positioning, option traders have taken on a bullish stance in the near term, with rising 25 Delta Skew for both 1-week (8%) and 1-month (5%) tenors. This implies that many are expecting a rebound in Bitcoin’s price despite the recent dip from $108K to $103K.
On a longer-term basis, however, traders are still buying put options, indicating that they are preparing for potential bearish moves as the year draws to a close. This is particularly concerning given QCP Capital’s warning that an Iran-Israel conflict could lead to inflationary pressures and dampen risk-on markets later in the year.
It remains to be seen how Bitcoin will react if the U.S. decides to join the war, but one thing is certain – the market direction has become increasingly uncertain amid these geopolitical tensions.
Stay tuned for more updates as this situation unfolds!
Source: ambcrypto.com