The Israel-Gaza war could threaten a potential Bitcoin rally following a Fed rate cut after the FOMC meeting on September 18. An interest rate cut is considered bullish for the flagship crypto. However, the Israeli Gaza war threatens to impede any positive momentum the BTC price is meant to enjoy.
The Israel-Gaza conflict will likely halt a Bitcoin rally amid an imminent US Fed rate cut. Crypto analyst Doctor Profit suggested in an X post that the war will likely spark more fear in the market, leading to market uncertainty. Risk assets like BTC and other cryptocurrencies always suffer the most when conflicts like this escalate as investors move to sell off their holdings.
For instance, in October 2023, the BTC price dropped by over 3% as the Israel-Hamas war looked to escalate. More recently, the flagship crypto slumped by over 8% following Iran’s attack on Israel on April 13 earlier this year. Therefore, this time is unlikely to be different if the Israel-Gaza war heightens.
Tensions in the Middle East look likely to spiral as the Israeli government announced that they have expanded their focus in the year-long Isreal-Hamas war. The country is considering increasing its military presence in Lebanon as it looks to take more hefty measures against Hezbollah.
This development coincides with the potential US Fed rate cut that is set to be announced on September 18 following the FOMC meeting. Based on historical trends, BTC is expected to benefit from this macro decision, triggering a Bitcoin rally in the process. However, the Israeli Gaza war will prevent that from happening instantly.
The Isreal-Gaza war could undoubtedly be the trigger for a Bitcoin price drop below $50,000. Some analysts have already predicted that the flagship crypto could still suffer a price decline below this level. As such, tensions in the Middle East could eventually be what makes these predictions come through. F0r one, renowned economist Peter Schiff predicted that there could be a Bitcoin crash to around $42,000 and even further $20,000.
Crypto analyst Zoran Kole stated in an X post that he believes that the BTC price could drop to the low $40,000 range. He also highlighted a “clear” Head and Shoulders pattern developing on Bitcoin’s chart, which could send its price below $40,000.
#Bitcoin Update:
While round tripping my swing short back to entry, I still adamantly believe low 40ks are coming next.
There is a very clear Head and Shoulders pattern developing on $BTC with a measured move target down to sub 40k.
This coincides with a yearly open retest… pic.twitter.com/2ljC8dQjwS
— Zoran Kole (@Captain_Kole1) September 15, 2024
While there is undoubtedly market uncertainty with the Isreal-Gaza war hanging in the balance, Doctor Profit is still bullish about Bitcoin’s mid-term and long-term outlook. He predicts that the “inevitable flood of money printing” following a US Fed rate cut will silence any panic in the market.
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