Crypto Market Crash Likely as Qatari FM Warns of a Widespread War

Key Insights

• The crypto market crash may intensify after major warnings about the war.
• Donald Trump has warned that he will attack Iran’s civil infrastructure.
• Bitcoin price has formed a bearish flag pattern, pointing to a steep crash.

Bitcoin and the broader crypto market may be at risk of a steeper crash in the coming days or weeks as concerns that the ongoing Iran-US war will escalate. President Donald Trump has warned of an upcoming escalation, while Qatar has warned that a widespread war will happen.

Crypto Market Crash Possible as US-Iran War Continues

Bitcoin and most altcoins may fall sharply as signs show that the ongoing US-Iran war will escalate. In a Truth Social post, President Donald Trump warned that a “whole civilization will die tonight, never to be brought back again.”

The statement came as his deadline for when he will attack Iran’s critical infrastructure, like bridges and power plants, neared. Such a move would lead to thousands of deaths and constitute a war crime.

Meanwhile, in a press conference, the spokesman of Qatar’s Foreign Minister said that the country was getting tired of the ongoing war and that, together with its Gulf neighbors, they may be forced to retaliate against Iran, a move that would trigger a widespread war in the region.

Media reports suggest that Israel is ready to launch an attack against Iran’s infrastructure. In a notice today, the Israeli government warned Iranians against using trains.

On the other hand, Iran has maintained that an attack on its infrastructure will lead to retaliatory strikes against similar projects in the region. It has also identified key bridges, desalination plants, and other power infrastructure in the region.

An Escalation Will Lead to Higher Crude Oil Prices and Inflation

An escalation of this war will lead to higher crude oil and natural gas prices. Indeed, Brent and WTI crude oil prices jumped to over $110 on Tuesday, and traders on Polymarket predict that the price will get to over $120 soon.

Such a move would lead to higher consumer and producer inflation in all countries because of the importance of the energy sector on key areas like transport and parcel delivery. The prices of other items, such as fertilizer and aluminum, will continue to rise this year.

Indeed, data compiled by TradingEconomics shows that the upcoming US consumer inflation report will show that the headline Consumer Price Index (CPI) rose to 3.4% in March from 2.4% in the previous month. In a recent report, analysts at OECD predicted that inflation will jump to 4.2% this year.

Soaring inflation would push the Federal Reserve and other central banks to raise interest rates this year, as they did in 2022. The challenge, however, this inflation is driven by artificial causes and not increased consumption.

Another challenge is that the rate hikes would happen when the US is going through a stagflation, a period characterized by high inflation and slow economic growth.

Additionally, a war escalation will occur when investors are fearful about the economy. The Fear and Greed Index tracked by CNN Money has moved to the extreme fear zone of 22.

On the positive side, there is a likelihood that TACO will happen. TACO is a term meaning “Trump Always Chickens Out.” It refers to a situation where he always finds a way to enter some risky situation.

Bitcoin Price Chart Analysis Points to More Downside

Technicals also suggest that the BTC price will crash hard in the coming days, which would lead to lower crypto prices.

As the three-day chart shows, the coin has remained below all moving averages and the Supertrend indicator. It has also formed the second bearish flag pattern since late last year.

Therefore, the coin is likely to undergo a strong bearish breakdown in the near term. If this happens, it will drop to the year-to-date low of $60,000 and below. Notably, other top cryptocurrencies like Ethereum and Binance Coin (BNB) have formed similar bearish patterns.

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