The Trump camp suddenly hinted at negotiations with Iran, and the market is in an uproar.
If a deal can be reached, and the situation in the Middle East eases, it wouldn't be good news for the market:
Risk aversion demand will disappear: Once the situation stabilizes, the risk-averse halo of the 'digital gold' Bitcoin will fade, and short-term demand will definitely be affected.
Funds will flee: Money is more likely to flow back to traditional risk assets. The crypto market already has a ton of issues: Mt. Gox selling pressure, unstable ETFs, altcoins crashing, and liquidity is dried up, making it unable to absorb these funds.
Geopolitical premium will vanish: Once the price support from Middle Eastern risks disappears, the key support levels for Bitcoin and Ethereum will be in jeopardy.
The altcoin side is already a mess, and the market is very panicked.
Volatility will increase: Market sentiment is already fragile, and any slight disturbance could trigger programmatic selling, leading to even more severe stampedes.
Deal reached (worst case): Risk aversion demand disappears, and there are still a bunch of issues within the crypto circle; Bitcoin could drop to 90,000, and altcoins will continue to fall.
Deal collapses (best case): The situation remains tense, and expectations for interest rate cuts rise, potentially pushing $BTC back up to above 110,000.
Stalemate (most likely case): News keeps changing, and the market will follow with wide fluctuations. At this point, it’s essential to keep an eye on Bitcoin's support levels.
