Crypto Market Sentiment Remains in ‘Greed’ Amid Rising Israel-Iran Tensions
By Ciaran Lyons | Updated 4 hours ago
The ongoing geopolitical tensions following the recent escalation between Israel and Iran have not significantly dampened investor sentiment within the cryptocurrency market, as reflected in the latest update of the Crypto Fear & Greed Index. As of Sunday, this index, which gauges overall market sentiment, scored 60, indicating a persistent state of “greed,” even amid rising uncertainties.
Airstrikes and Market Response
The fluctuations in market sentiment came on the heels of Israel’s airstrikes on targets in Iran, which reportedly included military sites. Following these developments, explosions were reported in Tehran, prompting Iran to retaliate with a barrage of “dozens of ballistic missiles” launched at Israeli positions. Despite the escalating tensions, Bitcoin (BTC) has displayed resilience, albeit with a slight decline of 2.8% to settle at $103,000 on Friday.
Interestingly, this drop in Bitcoin’s price comes as it finds itself on the cusp of retesting its all-time high of $111,970, reached on May 22. At the time of this publication, Bitcoin was trading at $105,670, still showing an overall increase of 0.07% over the past week, according to data from CoinMarketCap.
Comparative Resilience
Market analysts have noted the relatively muted reaction from Bitcoin in comparison to past geopolitical events. For instance, during an earlier round of hostilities in April 2024, Bitcoin experienced a more significant decline of 8.4% following an unprecedented direct attack by Iran on Israel. The Crypto Fear & Greed Index, which then indicated a “Greed” score of 72, quickly shifted to a “Fear” rating of 43 within weeks of the conflict.
Crypto analyst Za commented on Bitcoin’s performance on social media, stating, “Bitcoin does not seem concerned about the Israel and Iran conflict (yet).” This sentiment was echoed by prominent crypto entrepreneur Anthony Pompliano, who characterized Bitcoin’s performance as “relentless,” highlighting the confidence many traders have in its ability to maintain stability above the critical psychological price level of $100,000. Analysts warn, however, that a fall below this threshold could trigger the liquidation of over $1.74 billion in long positions.
ETF Inflows and Outflows
In a related development, Bitcoin exchange-traded funds (ETFs) observed a continuous inflow trend, accumulating approximately $1.37 billion over the trading week ending Friday. This marks a significant moment for the ETF market, especially amid heightened geopolitical tensions. Conversely, the appetite for Ether ETFs appears to be waning, as they recorded net outflows of $2.1 million, ending a streak of inflows that had stretched for 19 days.
Market Outlook
The current geopolitical climate continues to play a role in shaping market expectations. As traders and investors navigate uncertainties, the Crypto Fear & Greed Index’s remaining in the “Greed” zone suggests a prevailing optimism about the crypto landscape, although analysts caution that this sentiment might wane if tensions escalate further.
In summary, while the market currently retains a greedy outlook despite significant geopolitical tensions, the situation remains fluid, and the sentiment could shift if developments unfold unfavorably in the coming weeks.
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