Bitcoin prices dumped almost $4,000 in less than 24 hours following an Iranian missile strike on Israel late on Oct. 1.

The asset was trading at just over $64,000 on Tuesday but it tanked hard to bottom out at a little above $60,000 following the attack.

BTC has since recovered to around $61,700 during Wednesday morning trading in Asia, but it remains down 3% on the day.

No Need to Panic

Market sentiment has rapidly changed from ‘greed’ a few days ago back to ‘fear’ today, according to the Bitcoin Fear and Greed Index.

Bitcoin Fear and Greed Index is 42 – Neutral
Current price: $60,836 pic.twitter.com/gi3cDBB2L6

— Bitcoin Fear and Greed Index (@BitcoinFear) October 2, 2024

However, this is nothing new, and the panic sell-off is largely irrational behavior. Some may label Bitcoin as a ‘safe haven’ asset, but it has previously exhibited this behavior during geopolitical tension.

BTC dumped more than 13% in the days that followed Iran’s drone strike on Israel in mid-April.

Conversely, commodities such as gold and crude oil are up today. Bitcoin pioneer Samson Mow saw the irony in this, posting on X on Oct. 2.

Imagine trying to hedge against war by selling #Bitcoin to buy paper gold that you can’t move anywhere in the event of actual war. https://t.co/KX6WDaBJiM

— Samson Mow (@Excellion) October 2, 2024

Analysts do not appear to be concerned as Bitcoin remains within its six-month range-bound channel despite this selloff.

Veteran trader Peter Brandt observed that the recent rally did not disturb the sequence of lower highs and lower lows.

“Only a close above $71,000 confirmed by a new ATH will indicate that the trend from the Nov. 2022 low remains in force,” he added.

Meanwhile, analyst “IncomeSharks” predicted another dip before things pick up later this month.

#Bitcoin – We are all taking guesses here. If we are to get Pumptober I think this is still the likely scenario. Make people think $59k is the low but wick to $57k. Then people are bearish and sell and we reverse. Slowly back up and finish the month red then November green. pic.twitter.com/33wAPHswyz

— IncomeSharks (@IncomeSharks) October 1, 2024

‘Rekt Capital’ said that BTC would test support at $59,800 following a retrace from resistance levels within the channel.

Elsewhere on Crypto Markets

The specter of war in the Middle East has rattled the entire crypto market, with total capitalization falling 4.7% on the day, or around $150 billion. It currently stands at $2.26 trillion, according to CoinGecko.

Ethereum fell almost 8%, dropping to $2,450, before recovering marginally during Asian trading on Wednesday.

As usual, the altcoins were bleeding out even more, with heavier losses for Dogecoin (DOGE), Toncoin (TON), Avalanche (AVAX), Shiba Inu (SHIB), Chainlink (LINK), and Polkadot (DOT).

In other words, it is the same old story for crypto and the same panicking from those with little conviction in the asset class.