The crypto market held steady this weekend even as the crisis in the Middle East escalated with the death of Ayatollah Ali Khamenei. Bitcoin price was trading at $67,400, inside a range it has been in the past few days. It remains up by 12.6% from its lowest level this year.
The market capitalization of all cryptocurrencies jumped by over 2.6% in the last 24 hours. Some of the top gainers were coins like Hyperliquid, LayerZero, Jupiter, Virtuals Protocol, and Solana. All these tokens jumped by over 7.4% in the last 24 hours.
Why the crypto market is stable amid the war in Iran
The crypto market is doing well as market participants react to the ongoing war in Iran that has disrupted the Middle East.
This crisis started when the United States and Israel teamed up and launched major strikes in Iran, resulting to the death of Ayatollah Ali Khamenei, the Supreme Leader.
Iran responded by attacking US military bases in the region. It also launched attacks on Israel and other key targets, including in Bahrain and Qatar.
The war in Iran will have major impacts depending on how long it goes on. A prolonged war will lead to higher crude oil prices, with analysts expecting it to soar to $100. On the other hand, a limited war will put a cap on how energy prices rise.
The crypto market is holding well because the new strikes in Iran were priced in, with odds of a strike rising to over 70% on Polymarket and Kalshi. These rising odds explain why crypto prices remained in a bear market before the strikes happened.
Therefore, crypto prices are holding steady because of a concept known as buying the rumor and selling the news. This is where investors buy an asset ahead of a major development and then sell it when it happens.
In this case, market participants sold crypto prices ahead for the Iran crisis and are now buying since it has happened.
At the same time, the crypto market is steady after Donald Trump hinted that he might end the war soon or extend it for months. Analysts expect that the US may opt for a limited stay in the region.
Crypto prices are still at risk as the Bitcoin price has formed a risky pattern
BTC price chart | Source: TradingView
The daily timeframe chart shows that Bitcoin price has remained on edge in the past few weeks. It has dropped below all Exponential Moving Averages (EMA), a sign that bears are in control.
At the same time, the Supertrend indicator has remained in the red in the past few months, a sign that bears are in control.
Most importantly, Bitcoin price has formed a bearish pennant pattern, which is made up of a vertical line and a symmetrical triangle pattern. This pattern often leads to more downside, especially when the two lines of the triangle near its peak.
With this confluence happening, there is a risk that the Bitcoin price will drop to the next key support level at $60,000, its lowest level this year. This retreat is possible now that volatility in the crypto market continues rising with the war in the Middle East continuing.
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