The ceasefire between Israel and Palestine, where will Bitcoin go after the violent rebound?

Written by: Luke, Mars Finance

Original title: Israel and Palestine ceasefire, Bitcoin violently rebounds, what’s next?

Just as the global market fell into panic over concerns of a full-scale escalation in the US-Iran conflict, a message released by former President Trump arrived like a "savior from the sky." On June 23 local time, Trump declared that his arch-rival Israel and Iran had reached an agreement on a "comprehensive and complete ceasefire."

As soon as the news broke, the market reversed sharply. The crude oil futures, which had previously plummeted due to war panic, instantly erased the risk premium; while Bitcoin, as a representative of risk assets, staged a thrilling V-shaped rebound, leaping out of the abyss of panic selling and strongly breaking through the $106,000 barrier. This frenzy ignited by "peace expectations" has led countless traders to believe that the worst moments are now behind us.

However, when the celebratory champagne bubbles have not yet dissipated, the market's euphoria is challenged by the brutal realities that follow. Is this fragile peace agreement the end of the conflict, or the prelude to an even greater storm? After experiencing a violent backlash, both the market and investors face a core question: What comes next?

A protocol that never existed?

To anticipate the next steps, it is essential to analyze the vastly different calculations behind this so-called ceasefire agreement involving the United States, Iran, and Israel. This seemingly clear agreement has been fraught with discordant tones and conflicting interests from the moment it was conceived, and its inherent fragility is key to understanding the current situation.

Iran's "categorical denial": Just as the market was interpreting rumors of a "high-level official from Iran agreeing to an agreement," the Iranian Foreign Minister made a decisive official statement on June 24, completely shattering the market's fantasies. He clearly stated that, to date, no "agreement" has been reached between Israel and Iran regarding a ceasefire or halting military actions. This official denial means that the so-called "ceasefire agreement" lacked Iran's recognition from the very beginning, and its foundation is even weaker than the outside world imagined, and it may not exist at all.

The U.S. "hurry to achieve results": The Trump administration announced a ceasefire with great fanfare, but its motives are more rooted in Washington's own dilemmas. The latest polls show that as many as 84% of the American public are worried about the escalation of the conflict, and this strong sentiment of "war aversion" is directly eroding Trump's already declining approval ratings. Against this backdrop, facilitating even a superficial ceasefire is an urgent need for him to shift domestic political pressure and shape the image of a "peace maker." However, this hasty political calculation may lead him to announce the agreement prematurely, without clear and firm commitments from all parties, especially Israel.

Israel's "Dead Silence and Secret Words": The most critical and disturbing player in this three-way game is undoubtedly Israel. Prime Minister Benjamin Netanyahu's reaction to the news of the ceasefire – neither confirmation nor denial, but a draconian "gag order" – is in itself an extremely dangerous signal. In Israel's political context, such a move usually means that there are deep divisions within the wartime cabinet, or that the next major military action is being planned. Netanyahu's government is under intense pressure from far-right forces within his governing coalition, and any form of "premature" ceasefire could be seen as weak, thus shaking the foundations of its governance.

The Phantom of Peace?

The logic of the market is simple and brutal: it trades on expectations. The reason why Bitcoin was able to stage a V-shaped recovery is entirely because the market constructed a complete optimistic narrative chain in a very short period of time: ceasefire → oil prices drop → inflation pressure eases → the Federal Reserve gains room to cut interest rates → expectations for liquidity easing are rekindled.

However, the first link in this chain, namely "ceasefire," is itself a castle built on sand.

Just as the market was immersed in the celebration of the "peace dividend," two urgent messages from the Middle East came like two buckets of cold water, waking up all the optimistic investors. Early in the morning of June 24, Beijing time, Israeli Prime Minister Netanyahu suddenly requested his cabinet members not to comment on the ceasefire agreement. Minutes later, even more shocking news arrived: explosions were heard in multiple locations in Tehran, the capital of Iran, and air raid sirens echoed through the night sky. The illusion of peace was ruthlessly torn apart by the sounds of real gunfire.

Strangely, despite the open disruption of peaceful expectations, Bitcoin's price did not collapse as anticipated, but instead stubbornly maintained its high level after the rebound. This is the core puzzle of the current market. This resilience does not imply that the market is ignoring risks, but rather reflects an extremely complex psychological game.

The market may perceive Israel's "final strike" as a predictable tactical action aimed at "saving face," rather than a reopening of full-scale war. Traders may be betting that this explosion marks the end of the previous round of conflict, rather than the beginning of the next. As long as there are no ground forces entering and no more intense cycles of retaliation, the market is willing to believe this is just a "procedural move," a performance that Netanyahu must play out to appease domestic hawks.

What is the next step? Three possible scenarios

After experiencing this roller coaster market from euphoria to panic, Bitcoin and the global market are at a crossroads. The next direction will depend on the subtle interactions between geopolitics, macroeconomics, and market sentiment. We believe that the following three scenarios may emerge in the future:

Scenario 1: The "W" shaped trend of a second bottom. This is the most pessimistic possibility. If the explosion in Tehran triggers a substantial retaliation from Iran, leading to a spiraling escalation of conflict, the optimistic narrative in the market will completely collapse. Oil prices will soar again, inflation concerns will reignite, and hopes for a rate cut from the Federal Reserve will evaporate. In this situation, the price of Bitcoin will inevitably begin a second round of decline, testing the key support levels of $92,000 and even $81,000 from earlier.

Scenario 2: The "Fragile Balance" of High-Level Consolidation. This is the situation currently unfolding. The market acknowledges the fragility of the ceasefire agreement, but at the same time chooses to believe that the intensity of the conflict will remain within a "controllable" range and will not escalate into a full-scale war requiring large-scale U.S. intervention. Under the expectation of "no catastrophic war," the price of Bitcoin may maintain a high level of fluctuation above $100,000. The market will enter a "listening to the wind" mode, being exceptionally sensitive to any movements from the Middle East, with prices oscillating between hope and fear.

Scenario 3: The slowly rising "new normal." This is the most optimistic possibility, but also the least likely. If Israel's strike is indeed the "final blow" and Iran chooses to endure or only responds symbolically, the regional situation will enter a relatively calm period. This will re-establish market expectations for "Federal Reserve interest rate cuts." In this case, Bitcoin may break free from the direct influence of geopolitical factors and return to a slow bull trend dominated by macro liquidity and internal supply and demand (such as ETF capital flows), gradually climbing upwards.

To determine the direction the market will take, investors need to closely monitor the following key indicators:

• The trend of oil prices (WTI): This is the most direct thermometer for measuring geopolitical risks.
• Dollar Index (DXY): Reflects changes in market expectations regarding Federal Reserve policies.
• Official Statement: Any formal remarks from the White House, the Pentagon, and the Israeli Prime Minister's Office.
• Military Dynamics: Any new military buildup or signs of conflict in the Middle East region.

The storm has not yet passed. After experiencing a false celebration, the world is holding its breath. The next step for Bitcoin will be shaped by the dissipating smoke over Tehran and the decisions made in the Washington deliberation room.