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The war in Israel escalates; How will crypto market react?

The war in Israel escalates; How will crypto market react?

After the long-standing conflict in the Middle East took an unprecedented turn with the massive terrorist attack on Israeli soil, the majority of assets in the cryptocurrency market traded slightly lower, although Bitcoin (BTC) has stood relatively firm and recorded only marginal losses.

As it happens, much like other financial markets, the cryptocurrency sector failed to remain immune to the shockwaves of the recent Middle East developments, although this effect has so far been relatively mild by comparison to some others (like gold), according to the data on October 10.

Specifically, at press time, the crypto industry’s market cap stood at $1.074 trillion,  its total market capitalization declining 1.56% in the last 24 hours, which also represents a decline of 1.47% in the last seven days, from around $1.09 trillion on October 3, as per the most recent information obtained from crypto monitoring platform CoinMarketCap.

Total crypto market cap 24-hour chart. Source: CoinMarketCap

At the same time, the discussions in the crypto space have (not unexpectedly) shifted away from regular price discussions and over to Israel and Palestine, according to the findings shared by the blockchain and behavior analytics platform Santiment on October 9.

Top 10 trending keywords on crypto platforms. Source: Santiment

As the platform’s experts pointed out, “the conflict has yet to have a notable impact on crypto, but further escalation may lead to increased price sensitivity,” the scale of which is yet to become apparent as the clashes in the Middle East spread and continue to intensify.

Bitcoin price analysis

Meanwhile, the flagship decentralized finance (DeFi) asset was, at the time of publication, changing hands at the price of $27,707, recording a decline of 0.44% in the last 24 hours but still an increase of 0.56% across the previous seven days and a 7.19% gain on its monthly chart.

Bitcoin 7-day price chart. Source: Finbold

Indeed, events on a global scale have demonstrated their effect on the crypto market on previous occasions, one of the recent examples being Russia’s invasion of Ukraine in February 2022, which led to a massive sell-off and resulted in over half a billion dollars in losses.

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