Skip to content
- Bitcoin shows minimal reaction to Iran-Israel conflict, defying market expectations.
- Raoul Pal links 89% of Bitcoin’s price moves to changes in global liquidity.
- Oil prices surge over 7%, but Bitcoin remains stable with only a 0.02% increase.
According to the expert, Bitcoin’s price stability is related to its liquid state rather than to the headlines about the war. However, according to macro investor Raoul Pal, what is important about coins, not political instability, are the liquidity trends worldwide.
Pal provided information on X, revealing how the price dynamics of Bitcoin are correlated to the world M2 money supply by almost 89%. This means that monetary growth has a greater impact on Bitcoin than wars or sensational news items.
An attack on Iranian energy resources organized by Israel, which resulted in fires in the South Pars gas field, directly affected oil markets. According to the Kobeissi Letter, there was a notable increase in oil prices and the anticipation of the further destabilization of the market during the new trading week.
One of the financial analytics companies, Alva, verified an increase of more than 7 percent on the oil futures attack. They indicated the possible threat to world shipping corridors in the event of lingering tensions further. Nonetheless, the price of Bitcoin did not change much, jumping by only 0.02 percent, supporting the liquidity-based theory conducted by Pal.
Liquidity Trends Take Center Stage in Bitcoin Market Behavior
It indicates a clear pattern in which Bitcoin swings together with fluidity in spite of wars, elections, or alterations in interest rates. According to his analysis, a more reliable mechanism for how Bitcoin performs can be viewed in terms of liquidity.
This perception is contrary to conventional financial thinking, which predicts that geopolitical risk is one-factor causing volatility in asset classes. Bitcoin’s withstood various world crises is a sign of increased decoupling from short-term exogenous shocks.
Implications for Cryptocurrency Investors
This view is a change in orientation because investors should not be concerned with geopolitical news but rather with monetary trends. Oil and equity markets are prone to spiking changes caused by conflict or political events, whereas Bitcoin’s path appears to be much more dependent on the bigger picture of the financial situation.
Therefore, Bitcoin is likely to continue trending unless some expounding geopolitical occurrence influences the worldwide reserve of money to some apex. This strategy would make it easier for market participants to navigate volatility and make choices based on liquidity patterns rather than being affected by headlines and other speculation.
Also Read: Adam Back Once Tried to Buy All Bitcoin at $0.02 to Stop Total Collapse
