The intensifying geopolitical conflict between Iran and Israel have cast a dark shadow over financial markets, triggering a broader bearish sentiment that has hit the crypto world hard.

Bitcoin has fallen nearly $4,000, falling from an intraday high of $64,000 on October 1 to a low of $60,315. It has since recovered slightly and is trading at $61,700 at the time of writing.

American tech stocks weren’t spared either, with Apple and Nvidia taking a roughly 3% hit, while the Nasdaq 100 was down more than 2%.

Meanwhile, commodities like gold and crude oil are rising as tensions in the Middle East heat up. Yet, Bitcoin seems to be heading in the opposite direction, sparking the question: Is it the safe haven asset we think it is? 

Is Bitcoin Worth the Status of a Safe Haven Asset?

Gold prices surged by 1.4% in a single day, reaching $2,665 per ounce on October 1. Meanwhile, crude oil prices jumped 7%, hitting $75 per barrel. Bonds and the US dollar also rose after Iran launched major rocket strikes on targets across Israel late on October 1.

Li Xing, financial markets strategy consultant at Exness, said:

The escalating conflict in the Middle East has prompted investors to seek safety in gold, boosting its appeal amid broader market uncertainty.

Bitcoin, often named as a safe-haven asset, seems to have missed that memo, dropping more than 3% in the past 24 hours. Its price fell from $66,000 to $61,000 and is now hovering above the $61,273 support level. The widespread bearish sentiment in the market has resulted in the biggest outflow seen in the past three weeks.

Panic selling could dash any bullish hopes, potentially pushing Bitcoin toward the psychological support level of $60,000. A further dip might make Bitcoin vulnerable to testing the $57,270 level.

The overall cryptocurrency market capitalization has dropped 6.02% in the past 24 hours. On Tuesday, spot Bitcoin ETFs recorded an outflow of $242 million collectively.

Some traders and analysts believe the worst is yet to come.

Jesse Colombo, market analyst and investor, emphasized:

ETH is facing its largest liquidation event at 6% since "Black Monday" on August 5, when Ethereum witnessed massive liquidations exceeding $200 million.

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Source: CoinGlass

CoinGlass data shows that over $100 million in positions were liquidated during the latest downturn, with $98 million coming from long positions.

Market Recovery Is Still Possible

BlackRock CEO Larry Fink mentioned in an interview with Fox Business that BTC could still serve as an alternative hedge against inflation.

At the time of writing, Bitcoin is trading at $61,636, signaling potential stabilization.

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Source: TradingView

If Bitcoin manages to hold the $61,557 support, it could signal a potential reversal, possibly igniting a stronger bullish momentum. The next target is breaking the $65,292 resistance, a key level that could pave the way for further upward movement.

With targets like these, Bitcoin’s either planning a grand recovery or just giving us one more reason to refresh our price charts every five minutes.

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