The recent conflict between Israel and Iran has significantly impacted the cryptocurrency market, particularly Bitcoin. Bitfinex analysis points to a potential recovery following the sharp decline.
Overview of Bitcoin Decline
Bitcoin (BTC) experienced a sharp decline following the onset of the conflict between Israel and Iran, leading to a cautious atmosphere among investors. Despite starting the previous week with a 4.7% increase, events on June 13, when Israel initiated strikes on Iran, triggered a 7.3% drop in price.
Market Reaction Analysis
As a result of the attacks, panic swept through the market, reflected in a drop in net taker volume to negative $197 million. Bitfinex analysis indicates that such sharp declines often signify capitulation, which typically correlates with the formation of a temporary market bottom. The fear and greed index also rapidly fell into 'fear' territory.
Recovery Prospects
Despite the heightened market panic, the overall correction has been relatively mild, with Bitcoin showing a 9% peak-to-trough decline. Parts of the current trading range have been observed in nearly half of the sessions during the current cycle, indicating that recent volatility remains within typical bounds. If the $102,000 support zone holds and macro conditions stabilize, the current setup could pave the way for a renewed bullish trend.
According to the Bitfinex report, Bitcoin may be on the path to recovery if the support at $102,000 holds, and macroeconomic conditions do not worsen.
