Analysis: Ceasefire Expectations Between U.S. and Iran Boost Risk Assets, Short Squeeze and Low Volatility Drive Bitcoin Rebound
Odaily According to reports, driven by news of potential ceasefire talks between the U.S. and Iran, Bitcoin and global risk assets strengthened. Bitcoin rose to $69,350 early Monday, hitting a new weekly high. Reports indicate that the U.S., Iran, and regional mediators are discussing a framework for a 45-day ceasefire agreement. If reached, it could pave the way for a longer-term truce.
Analysis points out that this round of gains is primarily driven by ceasefire negotiation expectations, rather than Trump's tough stance. Market sensitivity to his rhetoric has diminished, with a greater tendency to judge based on signals of actual action. In the derivatives market, the crypto market has formed a typical "short squeeze," while both implied and realized volatility are at low levels. Market sentiment was previously leaning towards extreme fear, creating conditions for a rebound. However, the situation in the Strait of Hormuz remains a key variable. If there is only a ceasefire without a substantial resumption of shipping, the market movement may be just a short-term rebound; if negotiations fail, Bitcoin could still fall back to the $60,000 range. (Decrypt)
