Bitcoin price reclaimed $72,000 today after reports of the US and Iran agreeing on a landmark ceasefire lifted risk sentiment across global financial markets. This geopolitical breakthrough acted as a massive catalyst, encouraging investors to rotate back into risk-on assets after weeks of uncertainty.
The total crypto market cap saw one of its largest intraday gains this year, having risen over 5% at the present time to surpass the $2.53 trillion mark.
Furthermore, the Crypto Fear and Greed Index has shot up six points over the period, which has significantly calmed investor nerves and dampened fears of a deeper correction.
By the end of the Asian trading session, several altcoins had locked in double-digit gains, which goes to say that a significant amount of sidelined liquidity was finally flowing back into the market.
Why is Bitcoin price going up?
Bitcoin price hit an intraday high of $72,379 today, which supported a massive surge in buying demand after a geopolitical breakthrough around the US-Iran war.
The rally marked one of the largest single-day recovery sessions this year, wiping out weeks of bearish momentum in a matter of hours.
After weeks of escalating tensions, during which US President Donald Trump threatened back-to-back strikes targeting critical Iranian infrastructure, including power plants and the Kharg Island bridge, Iranian leaders, on the other hand, were initially hesitant about the proposed terms and reopening the Strait of Hormuz.
However, the two nations have finally agreed to a two-week ceasefire, and talks are ongoing over opening up the Strait of Hormuz.
Over the past weeks, the effective blockade has caused oil prices to skyrocket toward $119 per barrel, which has heavily pressured risk assets like Bitcoin as inflation fears and energy supply concerns dominated the narrative.
On Tuesday evening, Trump said that Iranian negotiators had submitted a 10-point proposal hours before his 8 p.m. ET deadline and, as such, the US has also agreed to “suspend the bombing and attack of Iran for a period of two weeks.”
The news was accompanied by a massive short squeeze. Over the past 24 hours, nearly $595 million worth of total liquidations were recorded.
Out of this, short positions accounted for over $427 million, as traders betting on further downside were caught off guard.
Bitcoin positions alone accounted for over $275 million of these liquidations, providing the necessary force to propel the price back above the $72,000 resistance level.
Is this the start of a bull run?
While Bitcoin may find some strong bullish momentum over the short-term and could rally higher if it manages to rally past key resistance levels near the $73,700 all-time high, there’s still some risks on the horizon, specifically the lingering concern that the US-Iran ceasefire will not last.
Historically, geopolitical truces in the region have been fragile, and the terms of the ceasefire called for Israel to stop its attacks against Hezbollah, which it may find difficult to maintain if its security objectives remain unfulfilled.
Trump will also come under pressure from his allies in Congress who favor a more “maximum pressure” approach toward Tehran, suggesting that any breach of the 10-point proposal could see the immediate return of hostilities and a quick reversal of today’s market gains.
What’s next for Bitcoin?
On X, some market analysts agree that there is still room for upside, but caution remains around key resistance levels that could stall the recovery.
According to crypto trader Jelle, traders remain concerned about a bear-flag breakdown repeating on the daily chart.
“The argument for a bearish flag into key resistance remains strong,” Jelle said.
The analyst cautioned against getting “euphoric” over the recent relief rally, noting that price could struggle near the flag’s upper boundary, which sits in the $72,000 to $76,000 supply zone.
On the upside, there is a notable liquidity cluster, according to analyst Ted Pillows, between the $73,000 and $73,500 range, which, if cleared, could open the door for a short-term extension higher before the market looks toward deeper liquidity zones below.
At the time of writing, Bitcoin had parted with some of its day’s gains and was hovering above $71,600.
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