Bitcoin, the leading cryptocurrency, has seen a resurgence in the past 24 hours, gaining approximately 1.7% and reaching a price of $66,002. This recovery mirrors a broader uptick in global equities and marks a reversal of last week’s risk-off sentiment, which was driven by concerns over escalating conflict in the Middle East.
André Dragosch, Head of Research at ETC Group, highlighted the impact of geopolitical tensions on the cryptocurrency market, noting significant downward reversals in global crypto hedge fund beta and a dominance of bitcoin long futures liquidations last week. However, Dragosch pointed out that cryptoassets have rebounded from these losses, driven by easing geopolitical tensions following the bitcoin halving.
In a recent report, Dragosch shared data from an in-house “cryptoasset sentiment index,” indicating a recovery from a year-to-date low triggered by last week’s rise in geopolitical tensions. Despite this rebound, Dragosch emphasized that any positive performance effect associated with the halving has yet to be fully priced into the market. He predicted that such effects might only become apparent approximately 100 days after the halving event, as the supply deficit induced by the halving accumulates over time.
On Monday, Bitcoin’s uptick was accompanied by gains in equity indices, with the European STOXX 600 and London’s FTSE 100 both showing increases. In the U.S., pre-market S&P 500 futures also indicated a rise, contributing to a positive market sentiment.
Bitcoin’s resilience amid geopolitical uncertainty and its correlation with broader market trends underscore its growing importance as a macroeconomic indicator. As geopolitical tensions continue to fluctuate, analysts will closely monitor Bitcoin’s performance for insights into market sentiment and risk appetite.