bitcoin experienced a sharp decline, briefly falling to $102,650 amid escalating Middle East tensions, notably Israel’s airstrikes on Iran.
This geopolitical crisis has historically triggered notable bitcoin rallies, with data indicating a median 17.3% gain within 50 days of such events.
Head of research at Bitwise Europe, André Dragosch, highlighted that since 2010, bitcoin’s returns after major downside catalysts have averaged 64.6%, reinforcing its role as a hedge during global uncertainty.
Dragosch’s analysis, supported by chart data, shows bitcoin’s post-risk event surge peaking around 30-40 days, suggesting that the recent dip may be a temporary correction rather than a long-term reversal.
In addition, Blockstream CEO Adam Back countered skepticism by demonstrating bitcoin’s resilience during geopolitical crises, often outperforming gold and equities like the S&P 500.
An October 2020 study utilizing Granger causality tests found bitcoin not only reacts to geopolitical risks but also acts as a stabilizing asset amid global turmoil.
The current market environment aligns with this pattern, presenting a compelling buy opportunity for strategic investors.
CryptoQuant’s data reveals bitcoin's Puell Multiple remains below 1.40, indicating the is in an undervalued zone despite recent peaks above $108,000.
This divergence suggests that miners are not actively selling into the rally, pointing to strong institutional demand and tight supply conditions.
Historically, a Puell Multiple below 1.0 signifies accumulation phases—implying the current rally might still be in its early stages and far from euphoria.
Additionally, Glassnode data shows bitcoin’s short-term cost basis levels at key thresholds: $106,200 (1-week), $105,200 (1-month), $98,300 (3-month), and $97,000 (6-month). These levels reflect where investors acquired their BTC and hint at potential support zones for stability.
Despite near all-time highs, these fundamentals indicate that bitcoin remains undervalued relative to its historic trajectory, especially given the rising geopolitical tensions and macroeconomic uncertainties.
As history demonstrates, geopolitical crises often act as catalysts for substantial BTC rallies once markets stabilize. These patterns suggest that current dip could precede a significant upside move—possibly echoing past gains of over 64%.
For traders and investors focused on crypto-market dynamics within the CeFi ecosystem and broader financial markets, understanding these signals is crucial for informed decision-making during volatile periods.
In conclusion, both on-chain metrics and historical performance reinforce the view that now is an opportune moment to consider accumulating bitcoin amid geopolitical unrest and undervaluation.
