Bitcoin’s trading after the conflict between Israel and Iran resembles a capitulation, and recovery may be coming soon, says Bitfinex’s report.
Bitcoin (BTC) experienced a sharp downturn following the recent conflict between Israel and Iran, triggering a wave of risk-off sentiment among investors. However, according to a Bitfinex Alpha report published on June 16, the market may be positioned for a recovery, provided global tensions do not escalate further.
While Bitcoin started the previous week on a strong note, rising 4.7% and testing its all-time high at $109,590, the unexpected Israeli strikes on Iran on June 13 unexpected Israeli strikes on Iran and the subsequent retaliations made traders much more risk-averse.
Investors panicked, but Bitcoin remained resilient: Bitfinex Alpha
A spike in oil prices, driven by concerns that a broader conflict could disrupt oil production, further added to macroeconomic uncertainty. Following the attacks, Bitcoin fell 7.3%, coinciding with a sharp drop in net taker volume to negative $197 million — a level suggesting widespread panic in the market.
According to Bitfinex analysts, such sharp declines in net taker volume often indicate capitulation, a pattern seen in previous market bottoms. The crypto fear and greed index also slid quickly into “fear” territory, reinforcing the narrative of a likely local bottom.
“This selling, however, combined with a spike in liquidations, resembles past capitulation—style setups that often mark local bottoms. If Bitcoin can hold the $102,000–$103,000 zone, it may suggest that selling pressure is being absorbed and that the market could be primed for recovery—assuming geopolitical risks don’t intensify further,” Bitfinex Alpha report.
Despite the panic, the overall market correction has been relatively mild. Bitcoin saw a 9% peak-to-trough decline — much smaller than previous major drawdowns. Bitfinex notes that this trading range has been observed in nearly half of the sessions during the current cycle, suggesting that recent volatility remains within typical bounds.
If the $102,000 support zone holds and macro conditions stabilize, the current setup could pave the way for a renewed bullish trend.
