Institution: Middle East Tensions Boost Short-Term Volatility but Do Not Affect Long-Term, Some Traders are Positioning for a Rebound

BlockBeats News, March 2nd. Last Saturday, the cryptocurrency market once again tested lower levels due to the Middle East conflict. QCP Capital stated that the initial drop triggered approximately $300 million in long liquidations, but the deleveraging scale was relatively limited, indicating that the market had reduced its positions before the recent volatility.

Laser Digital indicated that the US stock market rebounded from its lows, the US dollar and oil prices gave back early gains, and Bitcoin also reclaimed lost territory. Traders are betting that the economic impact will be limited unless the energy supply route remains disrupted.

Regarding crypto options, the short-term reaction was strong but the long-term impact was limited. QCP mentioned that as the conflict escalated, investors were observed increasing their long exposure for late March, indicating that some traders are positioning for a rebound after consecutive months of weak performance.

Macro-driven cautious sentiment is equally important as geopolitical factors. XS.com's Senior Market Analyst Linh Tran stated that as the market reevaluates the pace of Fed policy easing, the opportunity cost of holding non-yield assets remains high, leading Bitcoin to trade "cautiously" around $66,000 to $67,000. Geopolitical shocks often drive short-term volatility rather than reshaping Bitcoin's macro trend.

Stephen Coltman, Head of Macro at 21Shares, emphasized the inflation transmission path, pointing out that historically, wars have had inflationary effects, lifting commodity prices and widening fiscal deficits. This could complicate the interest rate outlook during the initial turbulence of risk assets.