The recent surge in Bitcoin's price, driven by the US-Iran ceasefire, is starting to lose momentum as markets await substantial progress in easing war-related tensions. After briefly surpassing $76,000, the cryptocurrency's price has fallen back, repeating the choppy pattern seen earlier in the week. This comes after a 10% increase, primarily fueled by the ceasefire news from the previous week.
However, despite ongoing optimism and President Donald Trump's suggestion that the conflict is nearing its end, progress in restoring oil flows through the Strait of Hormuz remains limited. According to QCP Capital, one of the world's largest digital asset market makers, 'a ceasefire extension alone is no longer sufficient; markets require tangible progress, such as restored energy flows and clearer disinflation.' Traders should monitor oil prices closely, as signs of normalization are likely to emerge in energy markets first.
The decline in Bitcoin and Ether's 30-day implied volatility indexes suggests traders expect significant progress soon. Meanwhile, Solana and DOGE may experience increased volatility due to rising demand for leveraged exposure. In traditional markets, the decline in the MOVE index, which measures US Treasury note volatility, has reversed the war-led spike, which is bullish for risk assets.
The stability in the US bond market helps ease credit and financial conditions, making it essential to stay alert.