Bitcoin’s price plummeted to $60,164 on Tuesday following heightened geopolitical tensions in the Middle East as Iran carried out missile attacks on Israel. The escalation has rocked global markets, affecting both conventional and crypto assets. Bitcoin was not immune to the noticeable -4% decline.

Market participants who expected a powerful uptrend this month, known as “Uptober,” were forced to reassess as broader market sentiment became less risky. However, according to several analysts, the reaction to geopolitical news may be exaggerated.

Will Bitcoin fall further?

Macro strategist Alex Krüger (@krugermacro) warns against a sudden change in market sentiment. With an X, he I’m writing“It was weird watching everyone get exuberant and call for ‘Uptober.’ From doom to darkness, in the blink of an eye […] Regardless of the conflict in the Middle East, this is an election year in the US. There is great uncertainty ahead.”

Krüger highlights the volatility typically seen in financial markets during U.S. election years, noting: “October is therefore the most volatile in election years, with stocks historically showing slightly negative returns.” He also added that speculative markets tend to react to uncertainty, and given the closeness of the election and Friday’s upcoming wage data, further volatility can be expected.

“Of course, if hiring is very strong next Friday, stocks will fall because we live in a ‘good news is good news’ system. But the time to push and hold is after the election and probably starts on election night itself,” Krüger says.

CRG Prominent Cryptocurrency Analyst (@MacroCRG) notes the potential for Bitcoin price growth despite momentary market turmoil. “This may be the quarterly lowest percentage of boys. Markets love finding highs/lows at the beginning of the candle. Moreover, geopolitical movements have a great tendency to fade away. Depending on Israel’s reaction, we may still see some turbulence, but the market is probably expecting that.”

Like Krüger, he emphasizes that increased liquidity in the market could provide support for Bitcoin, stating: “Liquidity will start to increase from now on, which BTC should feel immediately.” Overall, CRG remains sanguine about Bitcoin’s long-term trajectory, saying that despite near-term uncertainty, “100k BTC is coming.” dollars.”

Singaporean trading firm QCP Capital also offers its perspective on the effects of the conflict. In their newest investor notethe company writes: “The Israel-Iran conflict has escalated, with Iran firing more than 180 missiles. Still, the reaction in conventional financial markets was relatively muted. The S&P closed down only 1%, while crude oil (WTI) rose 2%.

However, the cryptocurrency market saw a sharper decline and Bitcoin faced more selling pressure. “BTC closed 4% lower with support holding at 60k. dollars. Further escalation of the conflict could potentially push BTC to the level of 55,000. dollars,” notes QCP.

Despite the immediate impact, the QCP Capital report also highlights that the broader economic environment remains supportive for risky assets over the medium term. “Middle East geopolitics will take center stage for now, but the shallow sell-off suggests the market still has a good deal in risky assets. This minor setback should not distract from the bigger picture.”

They also point to global monetary policy as an essential factor. “The influx of liquidity from the PBoC and potential fiscal support is likely to support asset prices in China, with bullish sentiment potentially spreading across the globe, supporting risky assets, including cryptocurrencies. […] Asset prices are expected to remain supportive through 2025 as both the world’s largest (Fed) and third-largest (PBoC) central banks have begun their austerity cycles in earnest,” QCP concludes.

At the time of publication, the BTC price was $61,286.

Featured image created with DALL.E, chart from TradingView.com