In a dramatic turn of events on Tuesday night, bullish sentiment swept over the cryptocurrency market as Bitcoin surged past $72,700, catalyzing a significant shake-up in bearish positioning that had built up in anticipation of continued downward trends. This sudden surge followed former President Donald Trump’s announcement of a two-week ceasefire with Iran via his platform Truth Social, just ahead of a critical 8 p.m. ET deadline.
The announcement sent shockwaves through the market, resulting in an astonishing $595 million in liquidations across 118,489 traders, according to data from CoinGlass. The liquidations heavily favored short positions, which accounted for $427 million, while long positions totaled $168 million. This marked a ratio exceeding 2.5-to-1, illustrating the extent to which traders had positioned themselves for further declines in the crypto markets leading up to the deadline. Notably, the largest liquidation occurred with an $11.79 million BTC-USDT short on Binance.
Bitcoin was the primary target of liquidations, representing $245 million, followed closely by Ethereum at $126 million. Additionally, tokenized Brent oil futures on the platform Hyperliquid faced $33 million in liquidations as crude oil prices fell more than 10%. This was compounded by a further $42 million in contracts for West Texas Intermediate (WTI) crude. Interestingly, oil, which has been at the center of liquidations during the ongoing conflict, took a surprising turn as Brent prices dropped to approximately $99 and WTI fell to around $95.
Over a critical 12-hour period, around $508 million was liquidated, with $398 million tied to short positions, marking one of the most aggressive short squeezes since early March when Bitcoin responded positively to initial ceasefire speculations. Other cryptocurrencies also felt the impact, including Solana’s SOL with $19.6 million in liquidations, ZEC at $13.4 million, and smaller amounts from XRP and various altcoins. Even tokenized silver and gold assets were inadvertently swept up in the market’s rapid unwinding as the commodity landscape adjusted by removing the “war premium.”
It is important to note that the ceasefire announced by Trump is conditional. He described it as a “double-sided ceasefire,” claiming that the U.S. had “already met and exceeded all military objectives.” While Iran confirmed the ceasefire, they added that transit of oil tankers through the Strait of Hormuz would require coordination with Iranian armed forces, taking into account technical limitations.
Leading into this event, market sentiment had painted a grim picture; the Fear and Greed Index registered at just 8 on Sunday, a continuation of readings below 10 throughout the conflict. Additionally, data from Santiment highlighted a predominance of bearish social media sentiment, with five negative posts for every four positive ones. All indicators suggested a looming downturn, which the ceasefire announcement overturned with a violent market reaction.
As Bitcoin reaches $72,700, it now stands at the upper end of the $65,000 to $73,000 range that has dictated market movements since the conflict began. The efficacy of this rally hinges on how the “two weeks” of ceasefire evolves, raising questions about whether this breakout will prove sustainable or be just another false dawn for traders caught in a volatile market.
