While traders are actively buying Bitcoin dips and we're seeing the first inflows into the spot ETFs we've long anticipated, the conflict in the Middle East has emerged as an unexpected but meaningful bullish driver for the crypto market, including Bitcoin.

Arthur Hayes, the well-known crypto enthusiast and former CEO of BitMEX, sets out this view in detail in his latest essay. He points to a historical pattern: geopolitical flare?ups of this kind often push the US Federal Reserve toward a looser monetary policy.

The main reason is rising government spending, which is unavoidable during military action. Increased fiscal burden encourages the Federal Reserve to support the economy and financial markets through stimulus measures. Historically, large military conflicts have often been accompanied by cycles of rate cuts intended to minimize economic damage and restore investor confidence. But it's important to understand that this does not happen immediately at the outbreak of a conflict — one should not expect an instant Fed reaction.

The energy factor will play a key role. Oil price spikes, likely amid Middle East tensions, create uncertainty and put pressure on consumers and businesses. The Fed, seeking to prevent a chain reaction across markets, frequently responds to such shocks by loosening policy. In this context Bitcoin — perceived by some as an alternative to fiat currencies — often appears among attractive instruments, Hayes argues.

Geopolitical turbulence also heightens interest in assets outside the traditional financial system. Investors seek to diversify their portfolios, moving capital out of riskier instruments and into assets seen as more "apolitical" and resilient to global shocks. Bitcoin, with its decentralized nature, can meet that need for perceived reliability in uncertain times.

Trading recommendations

Bitcoin

Buyers are currently targeting a return to $67,100, which would open a direct path to $69,300 and then on to $71,300. The most distant upside target is the high around $74,600; a break above that would signal attempts to return to a bull market. On a decline, buyers are expected at $64,900. A move back below that area could quickly push BTC toward $62,600, with a furthest downside target near $61,100.

Ethereum

A clear close above $2,007 would open the way to $2,078. The most distant upside target is the high near $2,169; a break above that would indicate strengthening bullish sentiment and renewed buyer interest. On the downside, buyers are expected at $1,915. A move below that area could quickly send ETH toward $1,845, with a furthest downside target around $1,783.

What's on the chart

• The red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.