Bitcoin came under significant pressure yesterday following the escalation of tensions in the Middle East. The likelihood of U.S. involvement in a military conflict has increased significantly, which puts pressure on risk assets, including the cryptocurrency market.

The volatility in the crypto market once again confirmed its sensitivity to geopolitical developments. Uncertainty related to a possible escalation in the Middle East triggered a panic sell-off of risk assets, including Bitcoin and Ethereum. Investors, seeking safety, moved their funds into traditional safe-haven assets such as the U.S. dollar and gold. Despite a slight recovery during the Asian session, the outlook for cryptocurrencies remains uncertain. Further developments in the Middle East will continue to have a substantial impact on the market. Any escalation or confirmation of U.S. involvement could trigger a new wave of sell-offs.

On the other hand, de-escalation of the conflict and reduced geopolitical tension could support a recovery in the crypto market. However, even in that case, Bitcoin and Ethereum would need time to regain their lost positions. Investors should remain cautious and consider the high risks associated with crypto investments in the current environment.

As for positive news, yesterday JPMorgan representatives held talks with the SEC's crypto division, discussing the potential for transferring elements of traditional financial markets to public blockchains. The meeting addressed the risks and benefits for all stakeholders and presented JPMorgan's platform for repo operations. Particular attention was given to the prospects of real asset tokenization.

This dialogue marks an important step in the evolution of relations between traditional financial institutions and the world of decentralized finance. JPMorgan, one of the world's largest banks, is actively exploring blockchain applications to improve the efficiency and transparency of financial operations. Tokenization of real assets, in particular, is a promising direction that allows splitting expensive assets, such as real estate or securities, into smaller digital tokens accessible to a wide range of investors. This could significantly increase market liquidity and open new investment opportunities.

However, moving traditional financial operations to blockchain entails several risks, including security concerns, regulatory uncertainty, and the potential for systemic failures. Therefore, cooperation with regulators like the SEC is crucial to ensure compliance and protect investors' interests. Ultimately, the successful integration of blockchain into traditional financial markets will depend on overcoming these risks and regulatory challenges. The ongoing dialogue between JPMorgan and the SEC is a key step in this direction, laying the groundwork for further development and innovation in the financial sector.

Trading Recommendations:

Bitcoin Technical Outlook: Buyers are now targeting a return to the $105,700 level, which opens the path to $106,200 and then to $106,800. The ultimate target is the $107,400 level; a breakout above it would indicate a strengthening bullish trend. If Bitcoin falls, buyers are expected at $105,100. A return below this area could quickly send BTC to $104,500, with the final target at $103,900.

Ethereum Technical Outlook:Clear consolidation above $2541 opens the way to $2568. The ultimate target is the $2607 level; a breakout would signal renewed buyer interest. If Ethereum declines, buyers are expected at $2509. A drop below this level could push ETH down to $2479, with the final target at $2445.

Chart Notes:

• Red: support and resistance levels where prices are expected to either stall or rebound.
• Green: 50-day moving average.
• Blue: 100-day moving average.
• Light green: 200-day moving average.

Testing or crossing moving averages typically halts or triggers market momentum.