Bitcoin’s value dropped 7.9% to $61,842 on April 13, following news of Iran’s retaliatory drone strikes on Israel, according to Reuters. The world’s largest cryptocurrency by market capitalization recovered slightly to trade around $63,000 by the morning of April 14, as per CoinDesk data.
Bitcoin’s decline marks a significant drop of 16.2% or $10,000 from its peak of $73,794 on March 14, which had been bolstered by demand for US bitcoin exchange-traded funds (ETFs).
Wider Cryptocurrency Market Faces Declines
Ether, the second-largest cryptocurrency by market cap, also fell 9.18% to $2,930 on April 13, losing $296.1 from its previous close. Other major cryptos, such as Dogecoin and Solana, saw similar decreases.
The CoinDesk 20 Index slipped 10%, with assets like Cardano’s ADA, Avalanche’s AVAX, bitcoin cash, filecoin, and aptos facing 15-20% losses.
Geopolitical Unrest Impacts Markets
The drop in cryptocurrency prices follows a spike in geopolitical tensions in the Middle East, according to a Bloomberg report. Cryptocurrencies remain open for trading over the weekend, and market sentiment may change by April 15 (Monday), when stock markets reopen.
Zaheer Ebtikar, founder of crypto fund Split Capital, stated that further escalation in the Middle East could prolong the crypto sell-off, as leveraged positions were “overwhelmed” in the past three days.
Coinglass data showed approximately $1.5 billion in bullish crypto positions were liquidated on April 12 and 13, marking one of the largest two-day liquidations in six months.
Traditional markets reacted differently, with safe-haven assets such as Treasury bonds and the US Dollar Index gaining ground. Key US stock indices, such as the S&P 500 and Nasdaq 100, fell 1.7% just before the close of the trading session.
Gold, another safe-haven asset, reached a new high of over $2,400 before slightly retreating, while oil prices rose by 1%.
Looking ahead, crypto investors are anticipating the upcoming Bitcoin halving around April 20, which will reduce the rate of new bitcoin production. This event has historically led to price increases, but there’s uncertainty whether the pattern will repeat, especially given Bitcoin’s recent price peak.
Sources: Investing.com
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