Coinbase analysts warn that President Donald Trump’s April 6 deadline on the Iran deal could put cryptocurrency markets in a precarious position. Global head of investment research David Duong stated a drawn-out standoff could repricing geopolitical risk, impacting all risk assets. The analysis notes that the direction of the West Asia crisis will influence oil prices, which historically correlate with pressure on crypto markets.
Analysts at Coinbase have highlighted inherent risks to the cryptocurrency market ahead of President Donald Trump’s April 6 deadline concerning the Iran deal. David Duong, the exchange’s global head of investment research, said the standoff leaves crypto in a precarious position for the upcoming weekend.
“The deadline is more about how a drawn-out standoff could reprice geopolitical risk premia across energy and risk assets,” Duong stated. He added that a deal could stabilize oil risk and revert assets to macro fundamentals, while escalation could increase global recession odds through crude oil supply shocks.
Trump recently projected the conflict could end within two to three weeks, which Duong estimated would mean short-lived volatility. The analyst further noted, “We think markets will continue to price a modest geopolitical risk premium into crypto until there is a clearer direction on when the conflict could end.” The broader market sentiment has remained in ‘extreme fear’ during the conflict.
In March, a surge in oil prices coincided with significant compression in risk assets. Bitcoin showed initial strength but faded, ending the month with a year-to-date loss exceeding 25%, while Ethereum fell by about 34%. Recent data shows some Bitcoin investors closing positions at break-even, with the Spent Output Profit Ratio nearing 1 as Bitcoin hovered near $68,000.
Increased demand for downside protection in the Options market for late April expiries was also reported. This activity reflects broader market unease ahead of the geopolitical deadline, mirroring the pressure seen on cryptocurrencies during the initial oil price spikes.
