Despite increasing geopolitical tensions from the Israel-Iran conflict, Bitcoin displays surprising stability. Market dynamics analyses show that the key factor influencing Bitcoin's price is global economic conditions rather than political instability.
Correlation of Bitcoin Fluctuations with Global Liquidity
Investor Raoul Pal noted that Bitcoin price movements have nearly an 89% correlation with the global M2 money supply. This suggests that monetary growth has a more significant impact on Bitcoin than current political conflicts.
Oil Price Reactions to Regional Situations
The recent strike by Israel on Iran's energy facilities resulted in a significant rise in oil prices, as confirmed by data from The Kobeissi Letter. In response to this attack, oil futures rose by more than 7 percent.
Impact of Liquidity Analysis on Crypto Investors
Pal's position emphasizes that investors should rethink their approaches to analyzing the Bitcoin market, focusing on liquidity changes rather than short-term geopolitical events. As a result, Bitcoin is likely to maintain its steady trends unless large geopolitical events directly impact the global money supply.
Thus, despite global crises and geopolitical conflicts, Bitcoin continues to maintain stability, highlighting the importance of analyzing the overall financial context instead of concentrating on political news.
