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The deepening of the Middle East conflict has traders worried that the world is on the brink of a third world war. Should you buy on the dip?
Iran has stated its intention to carry out "precise" strikes against Israel in retaliation for an airstrike by Israel on its embassy in Damascus on April 1, which resulted in the deaths of seven Iranian senior military commanders. On Saturday, Iran launched over 300 drones and ballistic missiles at Israel (Israel claims to have intercepted 99% of them).
Markets, reeling from the escalation of hostilities during Friday's trading session, saw a sell-off, causing the price of Bitcoin to drop to $60,000, down 16% from the local high on Monday.
While Bitcoin managed to hold its $60,000 range on the lower end, altcoins weren't as fortunate, finding themselves victims of indiscriminate selling, with prices falling to levels many deemed unthinkable the previous day; ETH fell below $3,000 for the first time since February, while SOL dropped to $120, retesting its 2023 high.
Historically, buying the dip after sudden geopolitical conflicts has proven to be a winning strategy, but it's currently unclear if an imminent war is the sole catalyst for the downturn or if the worst of this particular conflict is already over.
Stock funds experienced nearly $20 billion in outflows and saw heavy selling last week, indicating that market participants may be aware of other risk factors.
Israeli authorities are now pledging some form of response to Iran, although the U.S. and other allies are urging caution to prevent escalation, currently reluctant to engage in any offensive attacks, but the situation could continue to deteriorate. |
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Post time 21-4-2024 12:28:59