Bitcoin tumbles back to the $60,000 level as tensions in the Middle East rise

Cryptocurrencies were under pressure Wednesday, after bitcoin slid back to $60,000 to kick off what is usually one of its strongest months.

The flagship crypto was last off by more than 1% at $60,951.47, according to Coin Metrics. Late Tuesday, it fell as low as $60,175. Ether last traded lower by 2% at $2,447.19, after dropping 5% Tuesday.

Stocks related to virtual currencies also slipped. Crypto exchange Coinbase and bitcoin proxy MicroStrategy lost more than 1% each, after closing lower by 7.4% and 3.5%, respectively.

Crypto assets tumble to start October and the fourth quarter

Rising tensions in the Middle East dampened investors' risk appetite as the new trading month and quarter began. On Tuesday, Iran launched a ballistic missile attack on Israel in retaliation for its recent killing of Hezbollah leader Hassan Nasrallah and an Iranian commander in Lebanon.

"Surging unrest across the Middle East has propelled oil prices upward and reinforced the dollar's strength, casting a shadow over bitcoin and other speculative investments," said Chris Kline, chief operating officer and co-founder of Bitcoin IRA.

"In stark contrast to September's stronger-than-expected performance for bitcoin, October looms as a potential rollercoaster, influenced by the delayed ripple effects of last spring's halving event and the approach of a divisive American electoral contest," he added. "Meanwhile, a global monetary tug-of-war is unfolding as various central banks slash interest rates and expand their money supplies."

Additionally, investors are monitoring a strike by members of the International Longshoremen's Association on the East and Gulf Coasts that could affect the U.S. economy depending on how long it lasts.

October and November are historically the strongest months of the year of the year for bitcoin. It has finished this month higher in all but two years since 2013, averaging a return of nearly 23%. It has become known to crypto native investors as "Uptober."

Bitcoin has struggled to break its ceiling of $70,000, though the $55,000 threshold has provided strong support for the crypto asset. Some investors are doubtful that October will be the month it finally comes back to life, but most remain optimistic that the cryptocurrency will test new highs in the new quarter.