From Conflict to Easing: A Market Review of the 12-Day Shock
The story began on June 13, 2025. Israel launched the largest airstrikes against Iran in decades under the code name 'Lion's Rise,' igniting a wave of panic in global markets. Iran's missile retaliation further escalated tensions, with the Global Geopolitical Risk index (GPR) skyrocketing to 158 in a short time, reaching its peak since early 2024.
The market's reaction was a textbook 'Risk-Off' mode. Capital swiftly poured into traditional safe havens—gold, the US dollar, and US Treasury bonds. Meanwhile, the crypto market, as a representative of risk assets, suffered severe blows. Bitcoin's price fell below the $100,000 mark, triggering massive leveraged liquidations. According to AiCoin data, the total liquidation across the network reached $1.16 billion within 24 hours, forcing over 250,000 investors to exit, resulting in a brutal long squeeze in the market.
During the conflict, former US President Trump’s strong statements, particularly the hints at the closure of the Strait of Hormuz, became the sword of Damocles hanging over the market. As a vital artery for global oil transport (accounting for 20% of global traffic), 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 via social media that Israel and Iran reached a 'comprehensive and thorough' ceasefire agreement under the joint mediation of the US and Qatar. The news immediately eased the tense nerves of the market.
Return of Risk Appetite: Is capital shifting from gold to Bitcoin?
The ceasefire agreement became a direct catalyst for the rebound in the crypto market.
On June 24, during the Asian trading session, market sentiment quickly shifted from panic to greed. Bitcoin led the rise, gaining 4.5% within 24 hours, strongly breaking through $106,000. Mainstream altcoins like Ethereum and Solana performed even stronger, recording gains of 5%-7%. The total market capitalization of the crypto market increased by about 3% in a single day, approaching the $3 trillion mark again. Market sentiment on social media rapidly turned optimistic, with 'Risk-On' becoming a frequent term.
The core logic of this rebound is the rapid decline of geopolitical risk premium.
Capital Rotation: With the GPR index retreating, the previously flowing safe-haven capital into gold and the US dollar is now seeking higher returns, with Bitcoin becoming one of the primary assets to absorb this liquidity.
Derivatives Market: The funding rate of Bitcoin perpetual contracts has shifted from negative to positive, indicating that market sentiment has changed from bearish to bullish, with the bullish momentum regaining dominance.
Institutional Confidence: According to data from Farside Investors, 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 is the most direct window to observe institutional capital flows, and its performance confirms that 'smart money' is re-entering the market.
André Dragosch, research director at Bitwise, analyzed: "Bitcoin is highly correlated with macro liquidity and market sentiment. This event clearly showcases its role as a 'global risk sentiment barometer.' The ceasefire agreement has eliminated the greatest uncertainty in the short term, and the recovery of risk appetite is the fundamental driving force behind the price return."
The deeper game behind the ceasefire: Reconfirmation and challenge of the Bitcoin narrative.
This rollercoaster market movement is not only a price correction but also a stress test of Bitcoin's dual narrative.
Firstly, Bitcoin's decline in the early stages of the conflict reinforced its attribute as a 'risk asset.' In extreme panic with liquidity drying up, investors tend to indiscriminately sell all non-dollar assets for cash, and Bitcoin's performance is highly synchronized with the Nasdaq index.
Mithil Thakore, co-founder of Velar, pointed out: "In the moment of crisis, liquidity is king. Bitcoin's high liquidity makes it one of the preferred options for investors to cash out, explaining why it fell before the safe-haven narrative took effect."
However, the strong rebound after the ceasefire partially validates the narrative logic of 'digital gold' and 'inflation hedge.' Thakore added: "Geopolitical conflicts will raise defense spending and disrupt supply chains, inevitably leading to higher inflation in the long term. Bitcoin, as an asset with a fixed supply, has its value proposition against the over-issuance of sovereign currencies repeatedly mentioned in the context of conflict. Once market panic subsides, this narrative is likely to attract long-term investors to position themselves."
Notably, the hacking incident at Iran's largest crypto exchange, Nobitex, during the conflict also revealed the vulnerability of centralized platforms in geopolitical games, which in turn highlighted the resilience of Bitcoin's decentralized network.
Market Outlook: Key resistance levels and macro variables.
Although the ceasefire agreement provided a shot of adrenaline to the market, the path ahead is not without obstacles. Investors need to closely monitor several key variables:
Technical Aspects: Bitcoin has once again risen above $105,000, with the next key resistance level looking towards the previous high area of $108,000. If it can break through effectively, it is expected to open new space towards $112,000.
On a macro level: The stability of the Strait of Hormuz and the trajectory of global oil prices will directly influence the Federal Reserve's decisions. Nic Puckrin, founder of Coin Bureau, warned: "If oil prices continue to rise due to any subsequent friction, inflationary pressures will force the Federal Reserve to maintain a hawkish stance, which will pose headwinds for all risk assets (including cryptocurrencies)." Market expectations for a Fed rate cut in September will be key to determining the liquidity environment in the second half of the year.
Geopolitics: Whether the current ceasefire agreement is stable and if the situation in the Middle East will see reversals remains the biggest X factor. Any new sparks of conflict could push the market back into 'Risk-Off' mode.
In the end.
From plummeting to soaring, the 12-day conflict between Israel and Iran provided a vivid macro trading lesson for the crypto market. Bitcoin played a complex dual role: both a risk asset sold off in panic and a resilient asset that rebounded first after the crisis eased.
This baptism once again proves that Bitcoin's value lies not only in its code but also in how it is traded, interpreted, and narratives are assigned within the global macro chess game. With the repair of risk sentiment, the short-term outlook for the market is optimistic, but the road ahead remains full of uncertainties. For investors, understanding and navigating Bitcoin's 'dual personality' will be key to traversing the cycle.