Bitcoin Drops 5% After Israel Iran Airstrikes, Experts See Buying Opportunity

Bitcoin's price experienced a significant drop to $102,650 on Binance following Israel’s airstrikes on Iran, which led to a 5% increase in oil prices. Historical data indicates that such geopolitical events have often been followed by substantial gains in Bitcoin's value, suggesting that the recent dip could present a buying opportunity.

André Dragosch, Head of research at Bitwise Europe, analyzed data from the top 20 geopolitical risk events since 2010. He found that Bitcoin has averaged a 64.6% price increase within 50 days following these events, with a median gain of 17.3%. This pattern suggests that the current dip could be a temporary market reaction, with historical precedent pointing to substantial gains in the weeks ahead.

Blockstream CEO Adam Back reinforced this trend by presenting data from 10 major events since 2020. His analysis showed that Bitcoin's performance often outpaced gold and the S&P 500 during these periods. An October 2020 study further supported these findings, identifying bidirectional influences between Bitcoin price and geopolitical risk indexes, indicating that Bitcoin not only reacts to geopolitical events but also serves as a stabilizing asset during global uncertainty.

Data from CryptoQuant also suggests that Bitcoin is in buy territory. The Puell Multiple, which tracks miners’ daily revenue against the annual average, lingers near the discount zone below 1.40, despite Bitcoin’s recent peak above $108,000. This rare divergence, intensified by the April 2024 halving’s reduced block rewards, signals undervaluation and suggests the market is driven by institutional demand or tightening supply, not miner selling pressure.

Historically, a Puell Multiple below 1.0 marks accumulation phases, indicating Bitcoin’s current rally may be far from its euphoric peak. The post added, “Therefore, the current scenario represents a potential window of opportunity. The combination of a historically high price and still conservative fundamentals reinforces that the upward cycle may only be half over.”

Additionally, Glassnode data shows Bitcoin is currently trading between key short-term cost basis (CB) with its 1-week CB at $106,200, 1-month at $105,200, 3-month at $98,300 and 6-month at $97,000. The BTC cost basis represents the average price at which investors acquired their Bitcoin over a specific period. With most holders in profit, the risk of panic selling remains low, but it could change over the next few weeks.

These metrics—a discounted Puell Multiple and resilient cost basis—highlight a robust foundation for recovery, suggesting that the current dip could be a prime opportunity for investors eyeing Bitcoin’s next upward move. This analysis underscores the potential for Bitcoin to continue its upward trajectory, despite recent geopolitical tensions and market volatility.