Bitcoin Surges 4% to $106,000 as Israel-Iran War Ends

On the evening of June 23, the US President Donald Trump announced the end of the 12-day war between Israel and Iran. This announcement brought a wave of optimism to the global market, particularly in the cryptocurrency sector. The crypto market responded positively, with Bitcoin reclaiming $106,000 on June 24, marking a surge of more than 4%.

Trump's announcement via his Truth Social account highlighted the significance of the ceasefire. He congratulated both Israel and Iran for their decision to end the conflict, noting that the war could have lasted for years and destroyed the Middle East. Trump emphasized the importance of peace and respect during the ceasefire, expressing hope for a future filled with love, peace, and prosperity for both nations. He concluded his message with blessings for Israel, Iran, the Middle East, the USA, and the world.

The end of the Israel-Iran war brought a sense of relief to the global market, which had been on edge due to the geopolitical uncertainty. The ceasefire announcement led to a swift recovery in Bitcoin's price, which had briefly dipped below $98,500 on Sunday. The sudden price dip led to liquidations of long leveraged Bitcoin positions, but this accounted for only a small fraction of total open interest. The broader market's positive response to the ceasefire, along with expectations for U.S. interest rate cuts, further supported risk assets like Bitcoin.

Adding to the market's volatility, Bitcoin’s hashrate dropped by 8% over the past week. This drop fueled speculation about disrupted mining activity, particularly in Iran. However, analysts noted that sudden hashrate fluctuations are not uncommon and can be attributed to various factors, including energy-related shutdowns in the U.S. during extreme weather events. For instance, the April 22 storms in Texas and Oklahoma temporarily slashed the hashrate by 27%.

On the macro front, the ceasefire announcement led to a broader market rally. Oil prices retreated from a Sunday peak, and the S&P 500 rose by 1%. Expectations grew for U.S. interest rate cuts, with the probability of the Federal Reserve maintaining its current rate through November falling to 8.4%. Meanwhile, the chance of rates dropping to 3.75% or lower rose to 53%, up from 38% the previous week.

Despite the recent volatility, the quick recovery in Bitcoin's price suggests that institutional appetite for the cryptocurrency has not weakened. Traders are now balancing optimism over de-escalation with caution around global and macroeconomic developments. Whether Bitcoin can break through $110,000 remains uncertain, but the current market dynamics indicate a continued appetite for risk assets. The end of the Israel-Iran war has brought a sense of optimism to the market, and the crypto sector is poised to benefit from this positive sentiment.