U.S.-Iran Ceasefire: Bitcoin’s value jumped more than USD 72,700 following an announcement from President Trump via Truth Social that the United States and Iran had reached a two-week ceasefire. Hours before the deadline for his ultimatum for Iranian negotiators to submit a new 10-point plan for the reopening of the Strait of Hormuz to international shipping or risk being attacked, the Iranian negotiators submitted a response
In addition, Maine’s Supreme National Security Council agreed to the ceasefire, equally suspending military action against each other and allowing shipping through the Strait of Hormuz to take place freely while there is a two-week dialogue between the two governments on how they will end the war.
How the U.S.-Iran Ceasefire Impacts Markets
The U.S.-Iran Ceasefire removes an immediate geopolitical headwind that had been keeping oil above USD 100 per barrel, thereby keeping risk assets under pressure for weeks now. Bitcoin (BTC) rose 5.8% after the first hour of the announcement to USD 72,700, with other altcoins also rallying (which served as evidence of general risk-on market condition).
However, the ceasefire is temporary in nature and the Supreme National Security Council warned that the two-week ceasefire “does not end the war.” This is intended as two weeks of negotiations for a permanent ceasefire, and the expectation is for U.S. and Iranian officials to meet shortly. Any conflicts/friction in the negotiations, or collapse, could force Bitcoin to test the support level of USD 68,000 or even lower.
Fundamental and Technical Obstacles
While the price of Bitcoin has spiked, it continues to run into serious resistance at USD 73500, which has become a solid brick wall since events of the last week of March. After turning positive on Monday, Bitcoin’s spot exchange-traded funds (ETFs) turned negative again on Tuesday after witnessing outflow activity of USD 159 million yesterday, thus causing a negative impact on institutional impulse.
The Crypto Fear and Greed Index remains in extreme fear; the current score is 18, which suggests that based on capital markets following the U.S.-Iran Ceasefire, investors remain very cautious despite general relief through news headlines.
Where Will We Go From Here?
If the U.S.-Iran Ceasefire is maintained and leads to a full and lasting peace treaty, crude oil prices could fall into lower supporting price levels thus allowing a decrease in inflationary pressure, which would allow The Federal Reserve to ease their current monetary policy and would be good news for investors in all risk assets, Bitcoin included. Conversely, if negotiations fail and the ceasefire ends and returns to hostilities, Bitcoin could quickly wipe its gain away and retest lower supporting price levels.
