Bitcoin opened Wednesday on Wall Street by breaking a local record at $82,833, its highest point in 13 weeks. However, news around a potential US-Iran ceasefire agreement quickly led the cryptocurrency to lose its momentum and fall from its peak.
Geopolitical shifts move the market
Reports suggested that the US and Iran were nearing a 14-point ceasefire agreement, possibly including the reopening of oil shipping through the Strait of Hormuz. Yet, hopes for a swift resolution faded as the situation remained unclear. US President Donald Trump, posting via Truth Social, cast doubt on Iran’s full compliance with the proposed deal.
“If Iran does not accept the agreement, bombing will begin with much greater force than before,” President Trump announced.
Following Trump’s remarks, Bitcoin retreated to $81,500, scaling back some of the gains. Even so, it managed to maintain roughly a 1% increase on the day as uncertainty dominated trading sentiment.
The impact of geopolitical developments wasn’t confined to cryptocurrencies. Oil markets also experienced wild swings. West Texas Intermediate (WTI) crude prices plunged by more than 10% within a matter of hours, before recovering sharply back to $96 a barrel.
Market volatility and liquidations rise
Prior to the WTI drop, short positions in crude futures nearly reached $1 billion, a highly unusual surge that caught the attention of market analysts and was highlighted by The Kobeissi Letter on the X platform.
Crypto markets similarly saw volatility drive liquidations. In the past 24 hours alone, over $550 million in positions were liquidated, with $400 million of this stemming from short bets on cryptocurrencies.
Seasoned Bitcoin traders pointed out significant activity in exchange order books. While some liquidity remains at the $82,400 level, the latest price swings depleted much of the recent local liquidity. Technical analysts urged a broader perspective after Bitcoin’s three-month high, pointing out the importance of analyzing larger timeframes.
Analysts warn of potential correction
Some investors flagged Bitcoin as potentially overvalued in the near term. Trader CrypNuevo noted that on the four-hour chart, the 50-period simple moving average (SMA) could serve as a target, with prices possibly retreating to $78,432. Technical data indicate that sustained momentum will require continued strong buying interest.
With moving averages and liquidity zones under scrutiny, several market commentators now share the view that, despite recent advances, Bitcoin might be due for a short-term correction.
According to analysts, “The price has exhausted most of the local liquidity in the past 24 hours. Since we’re at a three-month high, it’s essential to use broader timeframes to identify the next significant levels.”
Earlier analysis shared by Cointelegraph had already noted that, in line with historical patterns, the current surge in Bitcoin may not be sustainable and warned of meaningful correction risks ahead.
