Crypto Ceasefire Rally Collapses: 3 Shocking Moves That Will Decide Bitcoin’s Fate

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Crypto Market Gives Back the Ceasefire Rally: What Happens Next Depends on 3 Developments

Key Takeaways

  • Total crypto market gained over 3% Wednesday on ceasefire news.
  • Iran named three ceasefire violations within the first 24 hours.
  • Bitcoin is down 1.02% with altcoins off 3% to 5.5%.
  • Strait of Hormuz remains effectively closed with zero merchant ships transiting.
  • Islamabad talks still scheduled Saturday but Iran calls further negotiations “unreasonable”.

The recent ceasefire announcement between the US and Iran on Wednesday caused the total value of the cryptocurrency market to increase by over 3% in a single day. Most cryptocurrencies saw price increases, with Bitcoin surpassing $71,000 and Ethereum reaching $2,280. Other cryptocurrencies, which had been losing value for weeks, rebounded as the possibility of reduced tensions in the Middle East and the reopening of a key shipping route gave investors confidence.

Within a day of signing the agreement, Iran blamed both the United States and Israel for violating it. This caused any initial progress to be lost, and a sense of instability returned.

Why Iran Says the Deal Is Already Broken

Iran’s Parliament Speaker, Mohammad-Bagher Ghalibaf, pointed to three ways the recent ceasefire was broken. He stated that Israel carried out its biggest attacks on Lebanon since the conflict started, resulting in many deaths near Beirut. Iran believes the ceasefire agreement meant Israel also had to stop attacking its allies, like Hezbollah. However, the US, including Vice President Vance and President Trump, argues the deal only applied to fighting between the US and Iran, not to Israel’s actions in Lebanon. This isn’t just a difference in how each side interprets the agreement; it’s a fundamental disagreement about what the original deal actually covered.

Additionally, Tehran claims a drone entered Iranian airspace after the ceasefire started. Furthermore, the White House restated its firm stance against uranium enrichment, which Iran interprets as a breach of the understanding they had regarding the nuclear agreement.

The Strait of Hormuz, a crucial shipping route, is still largely closed despite recent negotiations. As of Thursday morning, very few commercial ships were seen passing through the area. Iran’s Revolutionary Guard has stated that any ships traveling through without their approval will be considered targets. There are reports that Iran is asking for a fee of one dollar per barrel of oil, to be paid in cryptocurrency, but the Trump administration has refused this demand.

The market priced Hormuz reopening on Wednesday. Hormuz did not reopen.

What It Did to Prices

Cryptocurrencies experienced a significant downturn, particularly those that had seen the biggest increases yesterday. Ethereum dropped 3.1% to $2,180, while Solana fell 3.4% to $81.9, and XRP decreased 3.2% to $1.3. Both Avalanche and SUI saw losses of almost 5%, erasing the gains they made after the recent ceasefire announcement. Bitcoin fared the best, declining only 1% to $70,900. Tron was the only cryptocurrency among the top ten to increase in value, rising by 0.40%.

This isn’t a panic sell-off. The market is simply correcting itself after prices rose based on an expectation that didn’t come true, and this adjustment happened quickly – all within a single day of trading.

Four Outcomes That Will Set Crypto’s Direction

The US inflation data released on Friday and the talks in Islamabad on Saturday aren’t separate events – they’re connected. Depending on where oil prices land and what the inflation numbers show, there are four possible outcomes for the crypto market, but only one points to a likely price increase.

Negotiations have stalled, and as a result, oil prices have jumped above $115 a barrel. If Iran officially ends the current ceasefire by Saturday, or if talks fall apart regarding Lebanon and the Strait of Hormuz, the disruption to oil supplies will worsen significantly. This price isn’t a prediction, but a direct consequence of one-fifth of the world’s oil and gas supply being unavailable. This surge in oil prices makes it impossible for the Federal Reserve to consider lowering interest rates, as doing so could worsen already high inflation. For cryptocurrency, this situation is particularly negative: investors are likely to move away from risk, the dollar is strengthening, the Fed is unable to act, and the temporary boost from the ceasefire is gone. Bitcoin’s price is expected to find some support around $67,000-$68,000, while Ethereum may fall back to its pre-ceasefire level of around $2,060.

With oil prices staying high above $115 a barrel and the latest inflation data (CPI) showing a significant increase, concerns about stagflation – a combination of slow economic growth and high inflation – are growing. This makes it impossible for the Federal Reserve to lower interest rates, or even suggest they might do so in the near future. The high inflation reading, combined with already elevated oil prices, suggests that next month’s inflation data could be even worse, as rising energy costs continue to impact the figures. This situation offers no support for riskier investments, like stocks or cryptocurrency, as the impact of high oil prices overshadows everything else. In fact, cryptocurrency is experiencing further declines, and the gains seen earlier this week are likely to be erased – and potentially fall even further.

Oil prices remaining high, above $115 a barrel, combined with a lower-than-expected inflation report on Friday, creates a confusing situation. While the cooler inflation numbers don’t give the Federal Reserve a clear reason to act, high oil prices suggest inflation could rise again soon. This means the Fed will likely hold off on any interest rate cuts, the markets won’t get the boost they’re hoping for, and cryptocurrency is likely to remain flat or even decline without a strong signal to drive prices up. This isn’t a sign of lasting relief, just a temporary pause before potentially worse inflation data arrives.

Positive developments are emerging on multiple fronts: tensions in Islamabad are easing, oil prices are stabilizing, and inflation data came in lower than expected. This rare combination of factors could allow recent market gains to not only be recovered but also extended. If the ceasefire holds, it would reopen crucial shipping lanes, leading to lower oil prices. The cooler inflation numbers give the Federal Reserve more flexibility to hint at potential interest rate cuts, aligning with market expectations. This is good news for riskier investments, including cryptocurrencies. With de-escalation and the possibility of easier monetary policy, crypto has a strong foundation to potentially surpass its previous highs. This scenario makes it realistic to expect Bitcoin to rise above $72,000 and Ethereum to approach $2,280.

What the Market Is Actually Waiting For

CNN reports that a US delegation, including JD Vance and Jared Kushner, is still expected to visit Islamabad on Saturday. While Iran has expressed doubts about further discussions, they haven’t officially cancelled them. Although a ceasefire is still officially active, it’s largely ineffective, leaving the market in a difficult position – too much uncertainty to anticipate a rebound, but not enough clarity to predict a total collapse.

The Strait of Hormuz, a vital waterway for global energy, handles about 20% of the world’s oil and gas. It’s currently closed due to the ongoing conflict, and each day it remains shut undermines the potential benefits of the ceasefire – particularly for the economy. This also makes it more difficult for the Federal Reserve to consider lowering interest rates.

This article is for informational purposes only and shouldn’t be taken as financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. Always do your own research and speak with a qualified financial advisor before investing.

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2026-04-09 08:49