Bitcoin experienced a notable fluctuation on Sunday, briefly declining before rebounding to surpass $82,000. This volatility followed US President Donald Trump’s rejection of Iran’s counteroffer to a proposed peace deal amid ongoing tensions in the Middle East. In a post on Truth Social, Trump expressed his disapproval of the proposal, labeling it as “TOTALLY UNACCEPTABLE.” Iran had previously sought compensation for war reparations and the unfreezing of its financial assets as part of the peace negotiations.
In reaction to Trump’s remarks, Bitcoin dropped sharply from $81,430 to $80,520 within a mere 45 minutes. However, it swiftly reversed this trend, climbing nearly 2.3% to reach $82,347 just under three hours later, as reported by CoinGecko. This surge contributed to a significant impact on the market, eliminating around $64 million worth of short positions during that timeframe, according to Coinglass data.
The ongoing US-Iran conflict, particularly the disputes over control of the Strait of Hormuz—which facilitates one-fifth of the world’s oil trade—has continued to disrupt financial markets for over ten weeks. Following Trump’s latest comments, oil prices spiked by another 4.6%, reaching $98.7 per barrel. The S&P 500 futures index also experienced a slight increase of 0.13% since the market opened shortly after Trump’s announcement.
The implications of Trump’s refusal to accept Iran’s counteroffer have cast doubt on the prospects for a swift resolution to the conflict, with Israeli Prime Minister Benjamin Netanyahu asserting that hostilities will persist until Iran’s uranium facilities are dismantled.
Looking ahead, Bitcoin may find additional support due to anticipated regulatory developments in the US Senate this week. Markus Thielen, CEO of 10x Research, noted that two significant events could influence market dynamics: a Senate vote on the confirmation of Kevin Warsh as Federal Reserve chair on Monday, and the Senate Banking Committee’s markup of the CLARITY Act on Thursday. Thielen suggested that Warsh, perceived as more hawkish on inflation than the current Fed Chair Jerome Powell, could bring clarity and stability to federal monetary policy.
Thielen described the CLARITY Act as a groundbreaking piece of legislation for cryptocurrency, potentially serving as a pivotal moment for regulatory certainty within the digital asset landscape. According to him, both developments could provide a bullish outlook for Bitcoin, as enhanced regulatory clarity may alleviate institutional barriers, while a seamless transition in Fed leadership could minimize the policy uncertainties that often affect risk assets.
Despite the escalating tensions associated with the US-Iran conflict, Bitcoin has surged by 29.7% since the conflict began on February 28, following a US airstrike that resulted in the death of Iran’s Supreme Leader Ayatollah Ali Khamenei. During this period, Bitcoin has notably outpaced both the S&P 500 and gold, regaining some of its value after a previous peak of $126,080 last October.
