From conflict to easing: A recap of the market's tumultuous journey on the 12th.
The story began on June 13, 2025. Israel's military operation, codenamed 'Lion's Rise,' launched the largest airstrike against Iran in decades, instantly igniting panic in global markets. Iran's missile retaliation further escalated tensions, causing the global geopolitical risk index (GPR) to surge to 158 in a short period, marking a peak since early 2024.
The market's reaction is a textbook 'Risk-Off' model. Capital quickly surged into traditional safe havens—gold, the US dollar, and US Treasuries. Meanwhile, the cryptocurrency market, representing risk assets, suffered heavy losses. Bitcoin's price fell below the $100,000 mark, triggering massive leveraged liquidations. According to AiCoin data, the total amount of liquidations across the network reached $1.16 billion within 24 hours, forcing over 250,000 investors to exit the market, resulting in a brutal short squeeze.
During the conflict, former US President Trump's hardline statements, particularly the suggestion of a possible closure of the Strait of Hormuz, hung over the market like the Sword of Damocles. As the throat of global oil transportation (accounting for 20% of global volume), any threat of disruption is directly linked to global inflation expectations and the Federal Reserve's monetary policy path, further suppressing the valuations of risk assets.
The turning point occurred on June 24. Trump announced on social media that, with the joint mediation of the US and Qatar, Israel and Iran reached a 'comprehensive and complete' ceasefire agreement. Upon hearing this news, the market's tense nerves instantly relaxed.
Return of Risk Appetite: Capital Flowing from Gold to Bitcoin?
The ceasefire agreement became a direct catalyst for the cryptocurrency market's rebound.
On June 24, during the Asian trading session, market sentiment rapidly shifted from panic to greed. Bitcoin led the charge, rising 4.5% within 24 hours, strongly breaking through $106,000. Major altcoins like Ethereum and Solana performed even stronger, recording gains of 5% to 7%. The total market capitalization of the cryptocurrency market rebounded by about 3% in one day, approaching the $3 trillion mark again. Market sentiment on social media quickly turned optimistic, with 'Risk-On' becoming a high-frequency term.
The core logic of this rebound is the rapid decline in geopolitical risk premium.
Capital Rotation: As the GPR index declines, the previously influx of safe-haven funds into gold and the US dollar begins to seek higher yields, with Bitcoin becoming one of the main targets for this liquidity.
Derivatives Market: The funding rate of Bitcoin perpetual contracts shifted from negative to positive, indicating that market sentiment has turned from bearish to bullish, with long positions regaining dominance.
Institutional Confidence: According to Farside Investors data, the US spot Bitcoin ETF reopened its continuous net inflow mode after the ceasefire announcement, accumulating $1.3 billion over the past five trading days. The ETF serves as the most direct window to observe the flow of institutional funds, and its performance confirms that 'smart money' is re-entering the market.
Bitwise Research Director André Dragosch analyzed, 'Bitcoin is highly correlated with macro liquidity and market sentiment. This incident clearly demonstrates its characteristic as a 'global risk sentiment barometer.' The ceasefire agreement eliminated the greatest uncertainty in the short term, and the recovery of risk appetite is the fundamental driver behind the price rebound.
The underlying game behind the ceasefire: the reaffirmation and challenge of the Bitcoin narrative.
This rollercoaster market not only reflects a price correction but also serves as a pressure test for Bitcoin's dual narratives.
Initially, Bitcoin's decline at the beginning of the conflict reinforced its characteristic as a 'risk asset.' In the extreme panic of liquidity exhaustion, investors tended to indiscriminately sell all non-dollar assets for cash, with Bitcoin's performance highly synchronized with the Nasdaq index.
Mithil Thakore, co-founder of Velar, pointed out, 'At the moment the crisis erupted, liquidity was king. Bitcoin's high liquidity made it one of the preferred choices for investors to cash out, which explains why it fell before the safe-haven narrative took effect.'
However, the strong rebound after the ceasefire partially validates its narrative logic as 'digital gold' and 'inflation hedge.' Thakore added, 'Geopolitical conflicts will drive up defense spending and disrupt supply chains, inevitably leading to higher inflation in the long run. Bitcoin, as an asset with a constant supply, has its value proposition as a hedge against the overissuance of sovereign currencies repeatedly mentioned in the context of conflict. Once market panic subsides, this narrative will attract long-term investors.'
It is notable that during the conflict, the largest cryptocurrency exchange in Iran, Nobitex, was hacked, revealing the vulnerability of centralized platforms in geopolitical games, which, in turn, highlights the resilience of Bitcoin's decentralized network.
Market Outlook: Key Resistance Levels and Macro Variables
Despite the ceasefire agreement injecting a boost into the market, the road ahead is not smooth. Investors need to closely monitor the following key variables:
On the technical side: Bitcoin has re-established itself above $105,000, with the next key resistance level looking towards the $108,000 previous high area. If it can effectively break through, it may open up new space towards $112,000.
On the macro side: The stability of the Strait of Hormuz and the trend of global oil prices will directly affect the Federal Reserve's decision-making. Nic Puckrin, founder of Coin Bureau, warned, 'If oil prices continue to rise due to any subsequent friction, inflationary pressures will compel the Federal Reserve to maintain a hawkish stance, which will pose headwinds for all risk assets (including cryptocurrencies).' Market expectations for the Federal Reserve's rate cuts in September will be crucial in determining the liquidity environment for the second half of the year.
Geopolitics: Whether the current ceasefire agreement is solid and whether the situation in the Middle East will see reversals remains the biggest X factor. Any new spark of conflict could push the market back into 'Risk-Off' mode.
In Conclusion
From a plunge to a surge, the 12-day conflict between Israel and Iran provided a vivid macro trading lesson for the cryptocurrency market. Bitcoin played a complex dual role: both as a risk asset sold off in panic and as a resilient asset that rebounded first after the crisis eased.
This ordeal once again proves that Bitcoin's value lies not only in its code but also in how it is traded, interpreted, and narrated within the global macro chessboard. As risk sentiment recovers, the short-term outlook for the market is optimistic, but the path ahead remains full of uncertainties. For investors, understanding and navigating Bitcoin's 'dual personality' will be key to traversing the cycle.
