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Bitcoin: Will rising global tensions affect BTC adversely?

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Tensions in the Middle East could fuel more inflation.
BTC’s RSI signaled more downside.

Bitcoin [BTC] could be on the precipice of another major bearish outcome as yet another black swan event grips the world. If you have been keeping up with global trends, chances are that you are familiar with the recent escalated tensions in the Middle East.

How much are 1,10,100 BTCs worth today?

But to fully understand why the current situation could signal a strong resurgence in Bitcoin’s sell pressure, we must dissect the impact of the multiple wars.

The world got a taste of the impact of global conflicts on their livelihoods, whether directly or indirectly, when Russia and Ukraine got into it. Now the conflict between Israel and Palestine could escalate things further.

Are the stakes really higher?

While a direct impact may not necessarily be evident, we must look at the underpinnings that dictate the flow of liquidity in the markets. Notably, the Middle East has most OPEC countries.

Countries such as Iran and other oil producers in the region will likely want to protect their oil revenues. Hence, this could cause a move to slow down production until the conflict dies down. Lower oil production could lead to shortages and fuel could weigh heavily on the global economy.

This could potentially fuel more inflation.

Bitcoin has, for the last two years, been responding negatively to higher inflation rates. So, BTC bears could once again emerge dominant as inflation tightens the liquidity taps.

Bitcoin was already down by 2.81% in the last four days and had a $27,276 press time price at the time of writing. Economic and liquidity pressures could trigger more downside in the next few weeks if the situation continues to escalate.

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Author: Michael Nderitu

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