Key points to remember:
- Bitcoin reached $79,490 on April 27 before a sharp decline following the announcement of a proposed ceasefire between the United States and Iran.
- Walk volatility surpassing 2.63%, Coinglass reported $56.8 million in short liquidations in 12 hours.
- Michaël van de Poppe sees a break above $84,000 as proof of bear market ended after a 15% gain in April.
The factor behind the proposed ceasefire in Iran
Bitcoin briefly grabbed $79,000 on Sunday evening following reports that Iran had submitted a proposal to the United States to reopen the Strait of Hormuz. Market data shows cryptocurrency rose from just under $78,000 to a high of $79,490 in three hours. It remained above $79,000 until the early hours of April 27, when it fell to $77,500, erasing gains made just hours earlier.
The withdrawal wiped out more than $30 billion from bitcoinand brought its market capitalization down to $1.55 trillion. The price volatilitywhich Coinglass data showed exceeded 2.63%, generated approximately $56.8 million in bitcoin short liquidations over 12 hours, compared to $38 million in long liquidations.
As reported by several media outlets, Iran presented its proposal through Pakistani mediators, suggesting an extended ceasefire and reopening of the strait in exchange for a break in the US naval blockade. Although the U.S. military’s initial strikes and pressure campaign may not have yielded the desired results, the naval blockade of Iranian ports apparently turned the tide by depriving the country of a vital source of revenue.
In seeking to end the blockade and extend the ceasefire, Iran has indicated it may be willing to make a giant concession to end a war that has devastated the global economy. Some observers have noted, however, that Tehran’s proposals appear to relegate a key issue that led President Donald Trump to launch strikes: the nuclear program. The Strait of Hormuz and the U.S. blockade, they say, are the product of a war that both sides could use to exit a conflict without a clear exit path for the United States.
While tensions in the Middle East have fueled bitcoinof the increase in recent weeks, some analysts believe that the price movement indicates the cryptocurrency coming out of a bear market. Michaël van de Poppe, founder of MN Fund, said a break above $84,000 and $87,000 would be proof that “we are done with the bear market.”
“If you look at the statistical impact of the previous crash to $60,000, there was only one scenario in which markets made new lows: Q4 2022 when FTX collapsed,” van de Poppe said.
Although he admitted that a cataclysmic event similar to that of FTX could happen again, van de Poppe claimed that, statistically, a new all-time high is usually reached within 12 months of such a collapse.
As of 3:30 a.m. EDT on April 27, market data shows that bitcoin has gained about 15% month to date. The rally helped narrow the cryptocurrency’s year-to-date losses to 11%, down from a peak of more than 20% seen in late March.
