BTC and altcoins tank amid crypto market crash following Israel's attack on Iranian military targets. Tether investigation concerns rise.
The cryptocurrency market is experiencing a significant downturn following Israel's attacks on Iran, with Bitcoin dropping 2% and altcoins like Ethereum, Solana, and BNB facing even larger declines of 3-6%. Analysts are warning that the ALT/BTC pair has hit new lows, suggesting further drops may be on the horizon.
🔶 Key Highlights:
- Market Reaction to Conflict: Israel’s military strikes on Iran’s military bases have escalated tensions in the Middle East, leading to strong reactions in the crypto market. Bitcoin is now hovering around the support level of $65,500, while Ethereum has fallen to about $2,450, marking a 7.68% weekly loss. Solana is down 6.3%, slipping below $165.
- Impact on Altcoins: The geopolitical instability is particularly hard on altcoins. Analysts believe that the ongoing conflict has renewed fears, resulting in increased sell-offs.
- Tether Investigation: Compounding the situation, reports of a U.S. Department of Justice investigation into Tether have further unsettled the market. Although Tether has denied the allegations, the stablecoin briefly lost its dollar peg, trading at $0.9983. Tether's stability is critical for the crypto ecosystem, with experts warning that its collapse could lead to a disaster for the entire market.
- Market Sentiment: While some analysts suggest this downturn might be short-lived, others are concerned about the long-term implications of both the geopolitical tensions and regulatory scrutiny. The market has shown resilience to past regulatory issues, but uncertainty remains high.
In summary, as Israel’s military actions create instability, the crypto market is feeling the effects. The combination of geopolitical turmoil and regulatory investigations has left investors anxious and the market reeling.
🔶Tether Investigation Plays Spoilsport for Bitcoin and Altcoins
Reports of the US DOJ launching an investigation into Tether is another reason for the crypto market crash today. However, the USDT stablecoin issuer has clearly refused this fresh set of allegations calling it irresponsible reporting from WSJ.
However, the report has certainly put some dent as Tether (USDT) lost its USD peg and is trading 0.11% down at press time at $0.9983. Tether (USDT) is the largest stablecoin with a $120 billion market cap and has been instrumental in deciding the market movements over the past few years. Some market analysts believe that Tether is too big to fail at this point. Hilary Allen, a law professor at American University who studies digital assets, said:
“For the crypto industry and crypto writ large, I do think Tether is too big to fail. “If Tether were to go to zero tomorrow, it would be disastrous for the crypto economy.”
Jeff Dorman, chief investment officer at Arca, on the other hand, believes that the market has become immune to such regulatory developments. He added:
“We won’t really know until next week whether or not this has a longer-term effect on the market, but I would guess it has very little long-term effect, given the market has become immune to regulatory tape bombs”.
