Bitcoin surges 8% to $106,000 as Trump announces ceasefire

Bitcoin's price surged back above the $106,000 mark on Monday, recovering from a brief dip below $98,500 on Sunday. This recovery followed the announcement by U.S. President Donald Trump of a "total ceasefire" between Israel and Iran, which helped to calm market nerves that had been rattled by geopolitical tensions over the weekend.

The sudden price drop led to $193 million in liquidations of long leveraged Bitcoin positions. However, this accounted for only 0.3% of the total open interest, indicating that the derivatives market remained largely unaffected. With approximately $68 billion in leveraged positions still active, the market showed resilience despite the volatility.

Adding to the market's volatility, Bitcoin's hashrate dropped by 8% over the past week, from 943.6 million TH/s to 865.1 million TH/s. This decline fueled speculation about disrupted mining activity, particularly in regions like Iran, which is known for its significant role in global mining. However, analysts noted that such fluctuations are not uncommon and are often due to energy-related shutdowns in various parts of the world, such as the U.S.

On the macroeconomic front, oil prices dropped sharply on Monday, retreating from a Sunday peak of $77. Broader markets responded positively to the ceasefire, with the S&P 500 rising by 1%. Expectations for U.S. interest rate cuts also grew, as the probability of the Federal Reserve maintaining its current 4.25% rate through November fell 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 of Bitcoin suggests that institutional appetite for the cryptocurrency remains strong. Traders are balancing optimism over the de-escalation of geopolitical tensions with caution around global and macroeconomic developments. Whether Bitcoin can break through the $110,000 mark remains uncertain, but the market's resilience indicates continued interest from institutional buyers.