Bitcoin rallied 6% after a US-Iran ceasefire boosted global markets, triggering $280 million in liquidations. Derivatives data, however, shows limited bullish momentum. Persistent regulatory hurdles and a “fragile truce” keep the potential for a correction to $68,000 alive, as bears remain active.
Bitcoin surged 6% in under four hours on Tuesday, mirroring gains in global stock markets after the US and Iran reached a two-week ceasefire deal. The rally triggered a $280 million liquidation event in Bitcoin futures markets, catching many traders off guard.
The high correlation with S&P 500 futures suggests the rally was led by the potential reopening of the Strait of Hormuz. However, bearish sentiment was reinforced after US Vice President JD Vance stated that the Iran ceasefire is a “fragile truce.”
Bitcoin futures aggregate open interest saw only a minor 2.5% increase despite the price movement. The $280 million in liquidations remains relatively common and minor compared to the total $42 billion aggregate futures position.
Key derivatives metrics show a lack of sustained bullish demand. The Bitcoin futures annualized premium remained flat at 3%, below the neutral 4% threshold it has held since late January.
Demand for downside protection in Bitcoin options has also prevailed over the past two weeks. Premiums on put options have consistently outpaced call options, although fear levels have retreated from their March 26 peak.
Bullish confidence was already impacted by regulatory disappointments and a lack of progress on a US Strategic Bitcoin Reserve. The latest draft of the PARITY Act failed to include key tax exemptions, and David Sacks stepped down as the White House cryptocurrency czar on March 26.
Inflationary pressures have not yet faded, with Brent crude oil holding near $95 per barrel. With the ceasefire being temporary, the odds of a Bitcoin correction to $68,000 remain present according to market analysis.
