Analysis: U.S.-Iran Ceasefire Expectations Boost Risk Assets, Short Squeeze and Low Volatility Drive Bitcoin Rebound

Odaily News According to reports, driven by news of potential ceasefire talks between the U.S. and Iran, Bitcoin and global risk assets strengthened. Bitcoin rose to $69,350 early Monday, hitting a new weekly high. Reports indicate that the U.S., Iran, and regional mediators are discussing a framework for a 45-day ceasefire agreement. If reached, it could pave the way for a longer-term truce.

Analysis points out that this round of gains is primarily driven by ceasefire negotiation expectations, rather than Trump's tough rhetoric. Market sensitivity to his statements has decreased, with a greater tendency to judge based on signals of actual action. In the derivatives market, the crypto market has formed a typical "short squeeze," while both implied and realized volatility are at low levels. Previous market sentiment leaned towards extreme fear, creating conditions for a rebound. However, the situation in the Strait of Hormuz remains a key variable. If there is only a ceasefire without a substantial resumption of shipping, the market movement may be just a short-term rebound; if negotiations fail, Bitcoin could still fall back to the $60,000 range. (Decrypt)