Bitcoin price has formed support over $66,000 as investor hopes for an end to the ongoing U.S. and Iran conflict gained renewed momentum from Trump discussing a potential ceasefire, even if the Strait of Hormuz remains closed.
According to a recent report from The Wall Street Journal, U.S. President Donald Trump privately consulted with his advisors on negotiating an end to the ongoing war between the U.S. and Iran in the Middle East region over the next four to six weeks.
The war, which has entered its fifth consecutive month, has led crude oil prices to multi-year highs above $100 after Iranian forces maintained a blockade at the Strait of Hormuz, a key maritime trade route. Successively, Israel, as an ally of the U.S. in the ongoing conflict, struck down South Pars, Iran’s largest natural gas plant, which reportedly powers nearly 70% of the country. Failure of this infrastructure has led to concerns of a total power grid collapse.
In their recent assessment of the current situation at war, Trump and his aides suggested that reopening the Strait of Hormuz could extend the conflict beyond the desired timeline.
As such, Karoline Leavitt confirmed in a statement to the press that opening the Strait of Hormuz is not the primary goal of the U.S. and that the U.S. and Israel should focus on destroying Iran’s military capabilities and preventing them from developing a nuclear weapon.
Leavitt added that Trump believes that he can successfully end the ongoing hostilities with Iran while pressuring the nation to open trade routes later. On the pretext that his diplomacy falls flat, Trump would encourage allies in the EU and the Persian Gulf to assist in clearing the blockade from the region.
Bitcoin price briefly shot above the $68,000 mark after news of Trump’s involvement gained traction before falling back to the $66,000 support as volatility persisted.
However, Saudi Arabia and other neighboring nations have continued their appeals to Trump to escalate the war against Iran after Iran struck an oil tanker off a Dubai port and disrupted shipping lanes. These allied nations seek fundamental changes in Iranian leadership or an end to their regional influence.
Despite attempts to broker a peace deal by the U.S. previously, the Iranian government rejected the proposal on the premise that the offer was just a cover for foreign intelligence operations. They have also threatened to push oil prices to as high as $200 as they exercise control over the vital Strait of Hormuz to punish the U.S. and its allies during this period of heightened tension.
Iran also wants the U.S. to remove all economic sanctions and compensate for the damages it has suffered during the war. On top of this, Iranian leaders seek more control over the Strait of Hormuz to continue their nuclear missile program and deter U.S. interference in the future.
Bitcoin (BTC) price was trading at $66,387, as of last check. The bellwether asset had fallen 7% over the past week and over 30% from this year’s high of $97,538 recorded around mid January.
While a potential ceasefire between the U.S. and Iran could certainly provide a major boost for risk assets such as Bitcoin over the following weeks, the asset could continue to struggle if the blockade at the Strait of Hormuz is not called off as oil prices remain near record high levels.
This has triggered an investor flight towards traditional safe-haven assets such as gold and precious metals that have shown remarkable resilience amidst the geopolitical uncertainty.
For now, if Bitcoin manages to rebound back above $70,000 over the coming sessions, it could embolden bulls to push for higher prices, potentially reaching $75,000 or $80,000 if market conditions improve.
Further, traders will be closely keeping an eye on macro events, including March’s non-farm payrolls data later this week, which could determine the next major move for the market.
