BTC Purchase Opportunity as Middle East Tensions Increase

Takeaways from the conference:

• The Bitcoin return after significant downside catalysts is over 64.6%. This suggests that recent tensions in Middle East might be an excellent BTC buying opportunity.

• Bitcoin’s Puell Multiple is still in the discounted zone despite trading at near-all time highs. This indicates institutional accumulation and an undervalued marketplace.

BitcoinBTCBinance dropped the price to $102,650 following Israel’s strikes on Iran. Oil prices increased by 5% as tensions escalated. Historical data indicates that the BTC drop could represent a good opportunity to buy. Bitcoin’s performance in the past during times of geopolitical crisis is a good investment.

Head of research at Bitwise Europe, André Dragosch, highlighted This potential is outlined in an X Post, citing the data of all 20 top geopolitical risks since 2010. According to the analyst, Bitcoin prices have increased on average by 64.6% within 50 days. The median price gain is 17.3%.

This chart displays Bitcoin’s performance in relation to geopolitical events on a scale of logarithmic factors. Before a major risk event occurs, the mean performance (green) is relatively constant around 100. However, it surges in the days following the risk event and peaks around 30-40 calendar days after. This suggests the recent dip in market performance could only be a temporary reaction. Historical precedents suggest that substantial gains are likely to occur over the next few weeks.

Blockstream CEO Adam Back reinforced This trend counters gold advocate Peter Schiff’s skepticism by using data from 10 significant events that have occurred since 2020. Back’s chart mirrors Bitwise’s, showing Bitcoin’s 20% gain after the U.S.-Iran escalation in January 2020, often outpacing gold and the S&P 500.  

A October 2020 study These findings are also supported by other studies. The study used Granger causality testing on Bitcoin prices and geopolitical indexes between 2010-2019 to identify bidirectional influences. This indicates that Bitcoin does not just react to geopolitical changes, but it also acts as a stabilizing currency during times of global uncertainty. 

Related: Bitcoin mirrors 80% rally setup that preceded 2024 Israel-Iran conflict

Puell Multiple is in support of Bitcoin Investment Thesis

Data from CryptoQuant Also, Bitcoin’s price is a buy. The Puell Multiple (which tracks the daily revenues of miners against an annual average) is still nearing the discount zone, below 1,40, even though Bitcoin has recently topped out at $108,000.

The market’s undervaluation, exacerbated by April 2024’s halving of block rewards, is a sign that the demand for the tokens has been driven more by tightening supplies or institutional demand than by miner pressure. 

A Puell Multiple less than 1 historically indicates accumulation phases. This suggests that Bitcoin may still be a long way from reaching its current euphoric high. Post added.

“Therefore, the current scenario represents a potential window of opportunity. The combination of a historically high price and still conservative fundamentals reinforces that the upward cycle may only be half over.”

Glassnode data Bitcoin currently trades between its key short term cost basis (CB), with its CB for 1 week at $106,200 and the 1-month one at $105,200. 3-months at $98.300 is also included. BTC’s cost basis is the average price that investors paid for Bitcoin over a certain period. Since most bitcoin holders remain in profit, there is little risk that they will panic sell, although this may change over the coming weeks. 

These metrics— a discounted Puell Multiple and resilient cost basis—highlight a robust foundation for recovery, suggesting that the current dip could be a prime opportunity for investors eyeing Bitcoin’s next upward move.

Related: Bitcoin price Bollinger Bands ‘failure’ risks end of uptrend at $112K

The article is not intended to provide investment advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.