US-Iran Peace Agreement Key to Bitcoin's Future as Technical Signals Stay Bearish
Despite Bitcoin's latest price bounce, technical analysis reveals persistent weakness in momentum and volume metrics, with future appreciation dependent on US-Iran diplomatic progress.
The trajectory of Bitcoin's price rebound depends heavily on the outcome of ongoing peace negotiations between the US and Iran, as technical data demonstrates the digital asset continues to exhibit fragility notwithstanding its recent uptick, market analysts indicate.
According to Nick Ruck, a director at LVRG Research, who shared his analysis with Cointelegraph, while Bitcoin (BTC) has managed to climb back above the $67,000 threshold, the cryptocurrency is experiencing "momentum remains weak, with declining volume and stagnant on-chain metrics indicating that the recovery lacks conviction and could quickly fade."
Ruck further noted that should the recently negotiated peace agreement between the US and Iran collapse, the resulting geopolitical turbulence and possible disruptions to oil markets would place Bitcoin on a "volatile path."
"It may initially find bids as a hedge asset before broader risk-off flows push it toward key support zones, underscoring how macro and geopolitical catalysts continue to dominate crypto price action."
The leading cryptocurrency has lately been moving in correlation with traditional markets as institutional investors have accumulated positions in the digital asset. The most recent upward price movement occurred after US President Donald Trump announced on Sunday that the US had finalized a peace agreement with Iran to conclude months of hostilities, with the formal signing scheduled for Friday.
The majority of the agreement's details have not been disclosed; nevertheless, Trump indicated it would result in the reopening of the Strait of Hormuz and the US removing its blockade of both the Strait and Iran's ports. Following this, the two nations will commence 60 days of discussions concerning Iran's nuclear program and possible sanctions relief, according to a Monday report from the Associated Press.
In the meantime, Swissblock reported on Monday that Bitcoin's price momentum, which gauges the intensity of its price fluctuations, along with on-balance volume (OBV), an indicator that tracks buying and selling pressure, continue to exist in a "weak momentum and participation regime."
These two metrics continue to show negative readings even as Bitcoin (BTC) bounced back to surpass $67,000 on Monday after its decline under $60,000 on June 6, with price momentum registering -1, signaling weak movement strength, whereas OBV stands at its lowest level in years at -1.7 million.
According to Swissblock, during a conventional bear market, similar to what Bitcoin is presently going through, momentum deteriorates initially, followed by OBV contraction, and subsequently price breaks to lower levels.
That said, historical patterns indicate the more robust recovery indication emerges when both momentum and OBV transition back into positive territory. "Until then, the risk of another retest of the lows remains on the table," it said.
Bitcoin had already begun pulling back from Monday's intraday peak, falling beneath $66,000 during early trading hours on Tuesday.