Bitcoin fell more than 6% early Tuesday amid Iran’s intensifying missile attack on Israel tensions in the Middle East. As soon as the cryptocurrency market opened, Bitcoin fell to its current level, just below $61,000.

Bitcoin it had already dropped from around $62,200 that day, contributing significantly to a phenomenon: volatility that has sparked discontent around the world. Fearful of what this war might bring, investors have moved away from riskier assets like Bitcoin and looked to the conventional secure havens of gold.

How the market reacts to political unrest

Military conflicts weren’t the only thing that happened during the missile attacks; also shook financial markets. As tensions rise, the US government revealed that President Joe Biden had ordered military aid to Israel.

Investors are now even more concerned about the impact of this intervention on global security and the potential for the situation to worsen. As news channels filled with reports of missile launches, Bitcoin’s value has dropped by approximately $3,800 in just a few hours. It briefly dropped to around $60,200, but later in the day it slowly rose to around $61,500.

BTCUSD trading at $61,217 on the daily chart: TradingView.com

It was a bearish October, also called “Uptober” due to the historical gains in the past and that’s what traders were counting on, but the chaos dashed those dreams. Immense liquidations of huge cryptocurrencies made the sell-off even worse.

Positions in Bitcoin and Ethereum alone lost over $481 million. In the past, geopolitical situations have caused piercing declines in the value of cryptocurrencies, which shows how sensitive Bitcoin is to events happening around the world.

Gold remains unmoved, cryptocurrencies are taking a hit

I wonder how Bitcoin was losing, gold prices rose 1.2% to near record highs as investors fearing uncertainty sought safety. In fact, this is not a up-to-date pattern that has been seen before. People have seen this pattern in the tensions between Russia and Ukraine and in the growing tensions between the US and China.

Traditionally, bitcoin has performed well after initial declines caused by global turmoil. However, there are still traders who want to hedge the price and rush to reduce their investments, causing the price to fall.

The current state of affairs has many people wondering where Bitcoin and other cryptocurrencies will go in the future. Analysts believe Bitcoin could test support at $60,000 – or lower – if the situation worsens.

Featured image from The Times of Israel, chart from TradingView