After the missile attack by Israel against Iran that began on Friday, the price of Bitcoin suddenly dropped from $107,000 to $103,000, but afterwards the market changed its mind.
The trend of Bitcoin amidst the conflict between Israel and Iran
When the stock markets closed on Friday for the weekend, the price of Bitcoin had returned to $105,000.
However, on Saturday it attempted a new decline, stopping at 104,000$.
Therefore, the first drop, triggered by the start of the attack, ended at around 103,000$, and was followed by a first small rebound and then by a second drop, ending just above 104,000$.
It is quite evident that the beginning of the long-distance war between Israel and Iran has not had any significant impact on the price of BTC.
In fact, the current price is perfectly in line with last Thursday’s minimum peak, before the attack began.
Indeed, even analyzing the two declines on Friday and Saturday, it is noted that they were limited to reaching around the lows of May 31, that is, at levels that are absolutely not concerning.
The rebound of the Bitcoin (BTC) price
Already yesterday, with the markets still closed for the weekend, the price of Bitcoin had attempted a first rebound, but it failed during the day as soon as it moved back above $106,000.
Instead, last night, at the reopening of the markets, a true rebound began, which seems to want to bring the price of Bitcoin close to $107,000.
The reason why yesterday the rebound failed, while today it succeeded, is probably due to the Dollar Index (DXY).
In fact, when the stock exchanges are closed, the Dollar Index, which measures the strength of the US dollar against a basket of other global currencies, cannot move.
Yesterday there was no clear indication of what DXY might do at the reopening of the markets, so it was difficult for Bitcoin to already take a direction.
It should be remembered that the trend of Bitcoin’s price in the medium term tends to be inversely correlated precisely with that of the Dollar Index.
Today, at the reopening of the markets, the Dollar Index fell, momentarily reaching 98 points. This very drop supported the rebound of Bitcoin.
War and Bitcoin
From such a situation, one can draw the conclusion that the war between Israel and Iran is not having a significant impact on the price of Bitcoin.
However, this does not mean that BTC has become resilient to war.
Between yesterday and Saturday, two characteristics of this specific war emerged that led the markets to believe that the impact on the price of Bitcoin could be insignificant.
The first characteristic is that it seems to be only a local conflict, which for now does not involve anyone else outside of Israel and Iran. The USA, in fact, has refused to go to war in support of Israel, and Russia has refused to provide military support to Iran.
The second characteristic, however, is the one that might have had the greatest impact on the markets.
Between yesterday and Saturday, in fact, the situation seemed to worsen, with the risk of escalation increasingly high. The reaction of the markets, however, was not critical, because yesterday the hypothesis began to circulate that paradoxically an escalation of this conflict could end up shortening it.
This hypothesis indeed suggests that the Iranian regime might also be on the verge of giving in, and the markets seem to have wanted to bet on this hypothesis. It is by no means certain that they are right, but today it seems clear that the financial markets do not believe that this conflict can last long.
The price of oil
There has been an important consequence, however.
It should not be forgotten that Iran is one of the largest oil producers in the world, and even Israel produces a bit of natural gas.
The prezzo del petrolio since the end of January was declining, as in four months it went from $80 per barrel to less than $60.
To tell the truth, starting from the first half of May, it had already begun a rebound, but always remaining within a medium-term descending trend.
This trend was broken, upwards, precisely between Thursday and Friday, with a rise to about $70 that brought it back to the levels of the end of January.
Generally, an increase in the price of oil is taken by the markets as a good sign, but only when it is caused by an increase in demand. In this case, however, it is caused by a possible reduction in supply, therefore it should not be taken positively by the markets.
Despite this, even the futures on the S&P500, the main American stock index, are rising today, which reveals how little the markets believe in a negative impact from the war between Israel and Iran.
