- Tensions in the Middle East could fuel inflation.
- BTC’s RSI indicated more downsides.
Bitcoin [BTC] could be on the cusp of another major bearish outcome as yet another black swan event grips the world. If you’ve been following global trends, chances are you’re familiar with the recently escalated tensions in the Middle East.
How much are 1,10,100 BTCs worth today?
But to fully understand why the current situation could indicate a strong resurgence in Bitcoin selling pressure, we need to parse the impact of the multiple wars.
The world got a taste of the impact of global conflict on their livelihoods, directly or indirectly, when Russia and Ukraine got involved. Now the conflict between Israel and Palestine could escalate matters further.
Are the stakes really higher?
While a direct impact may not necessarily be obvious, we need to look at the fundamentals that dictate the flow of liquidity in the markets. It is striking that the Middle East has the most OPEC countries.
Countries like Iran and other oil producers in the region will likely want to protect their oil revenues. This could therefore lead to production being delayed until the conflict subsides. Lower oil production could lead to shortages and fuel could weigh heavily on the global economy.
This could potentially lead to more inflation.
Bitcoin has reacted negatively to higher inflation rates over the past two years. BTC bears could therefore become dominant again inflation tightens liquidity taps.
Bitcoin has already fallen by 2.81% in the past four days and had a price of $27,276 at the time of writing. Economic and liquidity pressures could add more downward pressure in the coming weeks if the situation continues to escalate.
BTC was already showing signs of bullish weakness at the time of writing, as the RSI gave up its previously observed short-term support.
Source: TradingView
What About Bitcoin’s Short Term?
The above price action indicated that BTC was feeling the effects of the market’s reaction to the disruptive situation. A white swan could change the situation and trigger a revival in demand.
Take a look at Bitcoins [BTC] Price forecast 2023-24
However, that remains to be seen as the focus has currently shifted to the conflict in the Middle East.
Despite the impact on markets, war is never a good thing. The biggest concern here should be the loss of life and disruption of livelihoods.
