Bitcoin (BTC USD) price fell sharply earlier this week, as Israeli airstrikes in Iran roiled markets. The BTC/USD rate dropped to about $102,650 on Binance that day.
This coincided with a roughly 5% jump in oil prices, reflecting heightened Middle East tensions. Crypto and other risk assets sold off amid the crisis, while safe-haven flows into commodities like oil surged.
Despite the recent dip, historical patterns suggest a rebound. Bitwise Europe research chief André Dragosch has highlighted that, after the top 20 geopolitical risk events since 2010, Bitcoin has on average climbed about 64.6% in the following 50 days (median gain 17.3%).
In other words, while the drop this week was steep, past crises were often followed by strong rallies.
Blockstream CEO Adam Back makes a similar point: he charted Bitcoin’s returns after ten major events since 2020 and found that BTC often outpaced gold and the S&P 500 during those runs.
For example, after the U.S.-Iran escalation in January 2020, Bitcoin gained roughly 20% in 60 days, compared with only single-digit moves in stocks or gold.
An academic study in October 2020 also found bidirectional causality between Bitcoin price and geopolitical risk indices, suggesting BTC can act as a stabilizing asset during uncertainty.
Overall, the chart above shows that Bitcoin’s average path (green line) tends to climb 30-40 days after a crisis. This historical context led many analysts to flag the recent dip as potentially temporary.
CryptoQuant’s on-chain data back the case that Bitcoin may be oversold. The Puell Multiple – which compares daily miner revenue to its annual average – remains unusually low.
Currently it is around 1.3 (below the 1.4 “discount” threshold), even as Bitcoin (BTC USD) traded near $108K highs. In past bull cycles, the Puell Multiple has spiked well above 2.0 at peaks.
The current low reading means miner revenues have not yet caught up to price, implying the rally is driven more by demand than frantic selling. Historically, readings below 1.0 are seen in market bottoms or accumulation phases.
Part of this dynamic is the April 2024 halving. The block reward per mined block was cut in half (from 6.25 to 3.125 BTC), meaning new supply is now more constrained.
The halving tends to stifle miner revenue in the short term, which helps explain why the Puell Multiple stayed low even as prices climbed.
In effect, supply-side pressure eased, so Bitcoin’s price gains have been driven largely by demand (institutions and buyers) rather than extra coins hitting exchanges.
Another bullish sign: on-chain cost-basis levels show that most holders are not underwater. According to Glassnode data, the average acquisition price for one-week holders is about $106.2K, one-month holders $105.2K, three-month $98.3K and six-month $97.0K.
Since current Bitcoin (BTC USD) prices are in the $102K-108K range, this means the typical holder has bought below today’s level.
Very few addresses are sitting at a loss. In practice, this limits panic selling: most investors are still in profit and have no immediate reason to dump coins.
In summary, the confluence of data suggests the recent dip may be an entry point. Historical precedent shows Bitcoin often bounces strongly after geopolitical shocks.
The Puell Multiple and cost-basis metrics indicate that fundamentals remain solid – miners’ earnings are lagging and supply is tight after the halving. Together, analysts say, these factors point to a robust foundation for a recovery.
While uncertainties in the Middle East could still unsettle markets in the near term, the evidence suggests this flash crash has traits of a classic dip-buy scenario rather than a trend reversal.
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