Bitcoin Price Reaction to Iran Deadline Will Be Telling

Bitcoin and Gold

It’s been about six months since Bitcoin topped near $126,000, and much like the stretch from late November through January, price is back in a horizontal trading pattern.

Typically, sideways consolidation after a decline has me looking for lower prices. The notable change this time is what isn’t happening. Despite weeks of bombing in Iran, BTC hasn’t broken down. It’s trading roughly where it was when "Operation Epic Fury" kicked off on February 28, and more importantly, selling is consistently being cut off below $66,000.

I'm not saying we have a straight-up bullish setup, but if you're chasing the short side down here, be very careful. The better setup is starting to tilt toward a bounce.

From a technical standpoint, there are early signs of stabilization. Price is attempting to hold above the 50-day simple moving average. And while the eight-day exponential moving average remains below the 21-day EMA, the gap is narrowing, and both averages have flattened. It’s not a clean bullish setup, but it’s no longer outright bearish either.

The missing piece is the macro overlay. With President Trump’s Tuesday 8 p.m. EST deadline for Iran to agree to the terms and reopen the Strait of Hormuz approaching, the geopolitical backdrop still matters. Tehran has rejected temporary ceasefire proposals and continues to push for a permanent resolution, while communication through intermediaries has yet to produce anything tangible. In other words, the market is waiting.

In the near term, the playbook is fairly simple. With support holding and technicals improving, I’m inclined to lean long in the upper $60,000 range. A credible de-escalation is likely to bring a move back toward the mid-$70,000s almost immediately. If this turns the other way and the U.S. follows through on strikes, then you’re quickly looking at a retest of the low $60,000s, and probably worse.

At the time of publication, Byrne was long IBIT.