$61,000 Retreat... Growing Concerns Over Middle East War Escalation [Bitcoin Now]

Impact Outlook of Fed Rate Cut Plans
Relief Amid Stronger-than-Expected US Employment Data

In the first week of October, the price of Bitcoin retreated to the $61,000 range. As the Gaza Strip war between Israel and the Palestinian terrorist organization Hamas approaches its one-year mark on the 7th (local time), concerns about a fifth Middle East war have arisen with Iran's direct involvement in the conflict. In this case, future Middle East trade could become difficult, potentially triggering a chain reaction of global inflation, which is expected to impact the Federal Reserve's (Fed) interest rate cut policy within the year.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 2:31 PM on the 6th (Korean time), the price of Bitcoin was $61,952.03, down 0.20% from the previous day. Compared to a week ago, it fell 5.74%, but rose 10.01% compared to a month ago. It has recorded a 125.39% increase compared to a year ago.

Bitcoin prices, which had risen to a peak of $65,900 in the early morning of the 30th of last month, reversed that morning and declined throughout the week. On the 3rd, the $60,000 level was even threatened. Earlier in the week, concerns about the Middle East war spread, causing Bitcoin prices to falter. On the 1st (local time), U.S. foreign media reported, citing a White House source, that Iran was preparing to launch ballistic missiles targeting Israel and that an attack seemed imminent. As a result, Bitcoin prices, which were eyeing $64,000, quickly retreated to $62,500. In fact, Iran fired about 180 ballistic missiles toward Israel.

Middle East risks are considered factors that stimulate global inflation. Inflation is also a key factor influencing the Fed's interest rate cuts. Yumi Kim, a researcher at Kiwoom Securities, noted in a recent report, "Considering that geopolitical risks from the Middle East have temporarily increased volatility in international oil prices and may heighten inflation concerns, uncertainty regarding the Fed's terminal interest rate level has increased, and major price variables may show unstable trends for the time being."

However, the U.S. employment data released on the 4th (local time) exceeded expectations, bringing relief to the market. Bitcoin prices also slightly rebounded. The U.S. Department of Labor announced that nonfarm payrolls in the U.S. increased by 254,000 in September compared to the previous month, marking the largest increase in six months since March (310,000).

According to the cryptocurrency data provider Alternative, the Fear & Greed Index, which indicates investor sentiment as of that day, stood at 50 points (neutral). This is a lower rating than last week's 63 points (greed). Alternative's Fear & Greed Index means that a score closer to 0 indicates extreme fear and pessimism about investment, while a score near 100 indicates optimism.