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The cryptocurrency market experienced a brief decline over the weekend as geopolitical tensions between Iran and Israel rose, causing momentary turbulence in global markets. However, the cryptocurrency market has shown notable resilience amid the conflict, with a notable recovery in the early hours of this week.
bitcoin (BTC), the largest cryptocurrency by market capitalization, fell as much as $60,800 as the conflict spread, and the market pullback resulted in a loss of approximately $962.40 million in liquidations.
Analysts attributed this slowdown to the expected consequences of the war, such as rising commodity prices and the possibility of high inflation, which could make interest rate cuts by central banks impossible. less likely.
โDuring a war, commodities such as oil and gold increase in value, resulting in high inflation. High inflation means no rate cuts, which is bearish for stocks and cryptocurrencies. This is why cryptocurrencies sold off heavily yesterday, as people anticipated that this war could lead to high inflation, which would not result in rate cuts,โ notes Ash Crypto in an X. mail.
Despite the initial slowdown, Bitcoin and major altcoins have recovered significantly. At the time of writing, Bitcoin is trading at $65,170, which is a gain of 2.66% in the last 24 hours. Ethereum (ETH) and solarium (SOL) have seen even more substantial rallies, 7% and 12.8% respectively.
Mike Novogratz, CEO of Galaxy Digital, predicted a price recovery after the initial sell-off, stating: โWars cost $$$โฆ. โWe pray we donโt have a bigger one, but after the risk increase, BTC will resume its (upward) trend.โ
Given the current geopolitical tension, Novogratz's statement is optimistic that the market will prevail over the effects of a major regional conflict, noting the importance of market stability in achieving growth for the crypto industry and its side sectors.
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