The cryptocurrency market experienced a significant downturn as Bitcoin’s price dropped by 2%, falling back to the support level of $65,500. This decline was further exacerbated by Israel’s attacks on Iran’s military targets, leading to renewed uncertainty in the crypto market and other risky assets.
The tension in the Middle East escalated when Israel conducted “decisive strikes” on Iran’s military bases, resulting in powerful explosions being heard in Tehran, the capital of Iran. This event sparked panic among crypto traders, causing a wave of selling.
Another factor contributing to the decline in the crypto market was the investigation by the U.S. Department of Justice into Tether. The issuer of the USDT stablecoin denied the allegations, claiming irresponsible reporting. However, this report caused Tether to lose its USD parity, with USDT trading at $0.9983, a decrease of 0.11% at the time of the press.
Market analysts are now closely monitoring the pressure on Bitcoin and altcoins. Benjamin Cowen suggests that altcoins may face further declines in the coming months, as they appear to be more vulnerable compared to Bitcoin, which has historically recovered quickly after previous attacks.
The potential collapse of Tether has raised concerns among experts. Hilary Allen, a law professor at American University, warns that such an event would be disastrous for the crypto economy. On the other hand, Jeff Dorman, the chief investment officer of Arca, believes that the market has become resilient to these regulatory developments and predicts minimal long-term effects.
Recent developments indicate that volatility in the crypto market is likely to persist. Traders are cautious due to geopolitical risks and regulatory news, emphasizing the importance of staying vigilant in this uncertain environment.
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Disclaimer: The information provided in this article should not be considered as investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.
