The cryptocurrency market is experiencing heightened uncertainty as the focus on minimizing the risk of an ETH reversal intensifies. Analysts at QCP Capital anticipate continued nervousness in the crypto sector amidst the escalating tensions in the Middle East due to the Iran-Israeli conflict. Furthermore, traders are now adopting a risk-averse approach in light of the underperformance of U.S. stocks.
The sentiment towards alternative contracts remains largely negative, indicating a significant reduction in long-term leverage. However, there is still a robust demand for Bitcoin (BTC) in the crypto market, contrasting with the weaker performance of Ethereum (ETH).
Given the current market dynamics of major cryptocurrencies, experts recommend a cautious approach to “bottom picking” and suggest purchasing BTC or ETH at a significant discount to the spot price.
In recent news, Bitcoin faced a sharp decline on April 14 following reports of Iran’s attack on Israel. The price of BTC dropped by 8% below $62,000, marking its most significant retreat since March 2023. However, the price slightly recovered to $62,300 according to CoinMarketCap data.
Last week, QCP Capital expressed confidence that the upcoming Bitcoin halving, which would reduce the miners’ reward for a mined Bitcoin block to 3.125 BTC, could significantly boost demand for the leading cryptocurrency. Other growth factors included increased inflows into spot ETFs and reports of Citadel, Goldman Sachs, UBS, and Citi joining BlackRock’s exchange-traded fund, with BlackRock serving as a broker-dealer authorized to create and redeem shares of the ETF.
According to KPMG, there is a growing trend among Germans towards increasing their investments in cryptocurrencies as the Bitcoin halving event approaches.