Bitcoin jumps on truce hopes as oil prices plunge – markets brace for volatility
Bitcoin surged nearly 5% on Wednesday, hitting a three-week high of $72,738, fueled by optimism following a temporary ceasefire agreement between the United States and Iran. The rally extended to $71,300 by mid-day Singapore, reflecting broader risk-on sentiment in financial markets.
Shifting sands: geopolitics drive crypto volatility
The initial truce, brokered by President Trump, sparked hopes of reopening the strategically vital Strait of Hormuz and alleviated fears of a further escalation in the region. Crude oil prices plummeted in response, contributing to a more favorable environment for risk assets, including cryptocurrencies. Ether also saw significant gains, climbing over 7.4% to $2,273.
"Bitcoin experienced a strong rebound this morning following the temporary truce and the relief that, for now, a further escalation has been avoided," stated Caroline Mauron, co-founder of Orbit Markets. "Markets are likely to be driven by equities and commodities today, mirroring this geopolitical shift."
However, analysts caution against complacency. Ivan Lim, a senior derivatives trader at FalconX, noted, "I continue to predict that markets will remain volatile until a definitive resolution is reached. But, for now, the overall picture is somewhat positive."
Institutional buying is bolstering Bitcoin's resilience. Over the past week, Bitcoin ETFs have witnessed a substantial influx of capital, with $471.3 million in net inflows on Monday, adding to the $22.3 million accumulated the previous week. This represents a stark contrast to the nearly $300 million outflows experienced the prior week. March saw inflows of approximately $1.3 billion, providing a crucial stabilization after four consecutive months of net selling starting in November 2025.
Despite a 40%+ decline from its all-time high exceeding $126,000 in October, Bitcoin has demonstrated relative stability, suggesting a diminishing pressure-selling cohort from institutional investors. Jeff Mei, BTSE’s operations director, highlighted that a bullish market depends on the recovery of oil and gas supply and its impact on inflation. “If inflation drops sufficiently and the Federal Reserve resumes rate cuts, a rally in cryptocurrency prices could materialize.”
The market’s fluctuations since February’s onset of the war underscore the ongoing impact of geopolitical uncertainty on global economic sentiment. The IMF’s head issued a stark warning: “Prepare for the worst.”