After showing a strong inclination toward a ceasefire, former US President Donald Trump now faces a shift in market sentiment as recent announcements from Washington suggest a tougher line against Iran. The symbolic move to allow just 15 ships a day to pass through the Strait of Hormuz has failed to reassure markets, which had been hoping for more substantial action. As a result, yesterday’s optimism has given way to increased caution today.
Europe under pressure as US-Iran talks begin
The European Union has only two days left to decide whether to side with the United States in the Hormuz Strait as negotiations between the US and Iran are set to commence. In the coming two weeks, attacks on Lebanon are expected to threaten the fragile ceasefire, and it was revealed that Pakistan recently persuaded Iran at the last minute to abandon plans for retaliation. Israel, meanwhile, remains critical of the ceasefire and is likely to continue its military actions against Lebanon. The most pressing question is whether Iran will wait two more weeks before taking any counter steps.
Against this volatile geopolitical backdrop, Bitcoin has dropped below $71,000 as renewed uncertainty leads risk markets to adopt a more cautious stance. Oil is once again testing the $100 mark, and altcoins are suffering losses exceeding 2 percent in early trading.
Mixed signals for Bitcoin from on-chain analysis
Two on-chain signals are coming into focus amid the heightened volatility. A few hours ago, analyst CryptoBullet pointed to the MVRV Z-Score, highlighting this leading indicator as a sign that Bitcoin could see further declines ahead.
“It’s impossible for $60,000 to be the bear-market bottom. The MVRV hasn’t even entered the green bottom zone yet. In terms of timing, there are still six months left in this bear cycle. Another significant drop is inevitable.”
The second key indicator is the Bitcoin Sharpe Ratio. Historical chart patterns show that Bitcoin has now entered an accumulation zone, implying that a major shakeout has already taken place. However, buy-side momentum has yet to return in force. The data suggests the market is in a transitional phase, meaning Bitcoin could either sink to deeper lows or consolidate before mounting a recovery.
Hyperliquid (HYPE) shows resilience amid market nerves
HYPE Coin emerged as one of the main beneficiaries of the earlier ceasefire optimism, presenting an attractive opportunity yesterday. Yet, as market confidence in the ceasefire fades, momentum behind HYPE Coin has also waned. Currently trading above $39, it could fall as low as $37.32 if the market downturn continues. Conversely, a positive scenario could see the coin overcoming $39.77 and targeting a move toward $42.
In the coming hours, news related either to further ceasefire violations or the unfolding negotiations is expected to shape market direction. Whichever narrative dominates will set the pace. Analyst Sherpa believes HYPE Coin might manage to outperform others even during this turbulent period.
While investors wait for clarity on diplomatic developments, the overall approach in both cryptocurrencies and traditional markets has become distinctly risk-averse. Uncertainty regarding Middle East tensions and shifting US policy is keeping many traders on edge, contributing to increased volatility.
For Bitcoin, analysts are watching technical signals closely, with the MVRV Z-Score and Sharpe Ratio both indicating further caution may be warranted. The lack of a significant pullback into oversold territory suggests the bear market could still have room to run, according to historical trends.
As for HYPE Coin and other altcoins, their fate in the coming days will likely be tied to broader macro headlines, from ceasefire progress to ongoing regional hostilities. Market participants should expect quick shifts in sentiment as news breaks.
