Bitcoin and broader financial markets climbed in early Asian and London trading Monday after reports emerged of potential ceasefire talks between the U.S. and Iran.
The leading crypto hit a weekly high of $69,350 Monday morning, and is currently trading at $69,245, up 3.5% on the day according to CoinGecko data. Oil dropped 1.4% from Friday's close, while the Nikkei gained 0.85% and S&P 500 futures rose 0.64%. Safe-haven gold, on the other hand, hovered near breakeven.
The moves come on the heels of a Reuters report that the U.S., Iran, and a group of regional mediators are discussing a potential 45-day ceasefire that could lead to a permanent end to the war.
Per Reuters, a potential framework to end hostilities and a ceasefire has been put together by Pakistan, with all elements needing to be agreed upon by Monday. The initial understanding would be structured as a memorandum of understanding finalized electronically through Pakistan, the sole communication channel in the talks.
The news follows an invective-filled message from U.S. President Donald Trump posted on TruthSocial Sunday, in which he declared that, “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!! Open the Fuckin' Strait, you crazy bastards, or you'll be living in Hell - JUST WATCH!” before signing off, “Praise be to Allah.”
Short squeeze
“It was the ceasefire negotiation reports from Iran, not Trump's remarks, that contributed to Bitcoin's price increase,” Ekko An, analyst at Seoul-based Tiger Research, told Decrypt.
The market has stopped taking Trump's comments at face value since he has repeatedly made statements without any substantive coordination, the analyst explained. “As a result, the market is now interpreting price moves by combining his statements with external action signals.”
Over $200 million in crypto short positions were liquidated over 24 hours—four times more than longs—according to CoinGlass data, suggesting a “textbook short squeeze,” Derek Lim, head of research at crypto market-making firm Caladan, told Decrypt. With market sentiment hovering in extreme fear, the market was primed for a reversal, he said.
A confluence of these factors, coupled with Morgan Stanley’s spot Bitcoin ETF launch on April 8, undercutting Blackrock IBIT’s 0.25% fee with a 0.14% expense ratio, also drove Bitcoin's spike, he explained.
Despite the potential rally in risk assets, the Strait of Hormuz remains a structural concern.
“Hormuz reopening would collapse the oil risk premium, which would pull forward rate cut expectations, which would re-lever the entire risk curve from equities to crypto,” Lim said. “Oil drops first, then rates reprice, then risk assets rally.”
However, he cautioned that a pause without meaningful normalization in the Strait “delivers a headline rally that will likely fade within days.” The market has seen this pattern three times since late March. “Until that number moves materially, rallies on rhetoric will keep getting sold,” Lim said.
Users on prediction market Myriad, owned by Decrypt's parent company Dastan, reflect the lingering uncertainty. They show growing optimism about a U.S./Iran ceasefire, with the chance of one in the first half of the year rising by over 10% on the day—though it still remains broadly negative at 45%. The market on more than 15 ships transiting the Strait of Hormuz before May has likewise turned markedly more optimistic on the day, up almost 7% to 60%.
Myriad users now assign a 46% chance that Bitcoin's next move will be a rally to $84,000, while crude oil is seen as having an 83% probability of pumping to $120 next.
Both analysts who spoke to Decrypt noted that a potential retest of $80,000 is possible, but heavily contingent on successful talks and a confirmed ceasefire. A failure, however, could send Bitcoin down to $60,000.
