Immediate Market Reaction & Short Squeeze

Bitcoin prices experienced initial volatility, trading down from approximately $103,000 to $98,500 following the US military strikes over the weekend. President Trump’s decision prompted a sharp downturn.

Analysis of crypto derivatives on Deribit reveals a significant increase in bearish bets, totaling $1.4 billion with concentrated positions put between the $95k and $100k price points. Trading platforms like Polymarket have shown a dramatic shift in sentiment, reducing the probability of Bitcoin hitting all-time highs by the end of July from nearly 70% to just 10% within less than a week.

Analyst Perspectives & Market Uncertainty

Market analysis aligns with the observed bearishness. MN Capital founder Michaël van de Poppe anticipates continued tension, stating, “Iran closing down the Strait of Hormuz is the next step in the escalation. As long as this keeps happening, there’s no sign that risk-on assets like Bitcoin will reverse.”

The current pessimism reflects the crypto market’s reaction to weekend geopolitical events and the ongoing uncertainty surrounding President Trump’s trade policies. The strikes add another layer of geopolitical risk to an already fragile global economic outlook.

Prospects for further escalation, including potential disruptions to key oil routes, are weighing heavily on traders. This sentiment initially caused declines in US stock futures and concerns about potential higher oil prices.

Perspective: Bitcoin as Safe Haven Rediscussed

Despite the geopolitical headwinds, Bitcoin retains its status as a potential safe haven asset, though its historical performance during such periods remains variable. Long-term enthusiasts point to the ongoing growth of institutional adoption (e.g., BlackRock’s ETF) versus traditional assets.

Industry figures react differently to the current situation. While some like BitMEX co-founder Arthur Hayes predict a temporary dip (“money printers revving up”), viewing the weakness as temporary, others focus on broader trends post-election day, noting increases in both Bitcoin and gold ETFs in recent weeks, coupling these positive movements as a counterpoint.

Crypto Market Movers

Ethereum saw a slight decrease of 1% during the same period, currently trading around $2,250.

Separate developments impacting the sector include South Korean regulators outlining a crypto ETF strategy for 2025 and Brent ‘Unchained’ delivering updates on missed news from the preceding week.

Other Notable News

In unrelated news, South Korean authorities have outlined their strategy for introducing or permitting spot cryptocurrency ETFs by 2025. Also, French law enforcement are investigating a gang suspected of involvement in the abduction of a crypto trader’s father during a petrol-soaked New Year’s Eve attack.