The recent crypto crash continued on Monday, June 23, as investors embraced a risk-off sentiment amid an ongoing geopolitical crisis.
Bitcoin (BTC) was trading at $101,000, up from Sunday’s low of $98,230, while Ethereum (ETH) rose to $2,250.
Total liquidations dropped to $624 million, with over 181,384 traders being liquidated. Here are the top three reasons Bitcoin and other altcoins may rebound soon.
1. Iran – Israel crisis could moderate
The first reason Bitcoin and other altcoins could recover is that the crisis between Israel and Iran may have reached its peak. Israel stated its objective was to prevent Iran from acquiring a nuclear weapon, and Donald Trump’s order of strikes on three nuclear sites may have achieved that.
Further, Iran is unlikely to escalate tensions with the United States after Trump warned of potential regime change while its armed forces has been heavily damaged by Israeli strikes over the past week.
Expectations of a truce help explain why U.S. stock futures like the Dow Jones and S&P 500 were little changed, and why crude oil pared earlier gains. Brent crude was trading at $76 at press time, down from $81 earlier in the day.
2. Bitcoin and altcoins always rebound after a major event
Historically, Bitcoin, altcoins, and equities tend to crash after major geopolitical events but rebound as markets adapt to a new normal.
For example, Bitcoin fell to $74,500 in April after Donald Trump’s Liberation Day speech, in which he announced sweeping tariffs on all imports to the U.S. Less than a month later, BTC surged to a record high of $111,900.
Bitcoin and other cryptocurrencies also plunged following Russia’s invasion of Ukraine but later recovered. During the early days of the COVID pandemic, BTC and altcoins crashed before rallying to new highs within months.
Similarly, the U.S. stock market crashed during the dot-com bubble and the Global Financial Crisis, only to bounce back.
3. Crypto crash to end because of strong fundamentals
Bitcoin and Ethereum both have strong underlying fundamentals, supported by rising ETF demand and falling exchange supply. Bitcoin ETFs added over $1 billion in assets last week, bringing cumulative inflows to $46.6 billion.
Institutional interest is also accelerating. Strategy added 245 BTC last week, bringing its total holdings to 592,345 coins, making it the largest known Bitcoin holder globally.
Other companies like Trump Media, The Blockchain Group, and GameStop have continued to accumulate Bitcoin. At the same time, supply on exchanges has fallen to the lowest point in years.
Ethereum ETFs have also continued to grow, while ETH’s exchange supply continues to decline. As a result, the supply-and-demand dynamics for both Bitcoin and Ethereum point toward a potential rebound in the coming weeks.
