Trump says U.S. is “very close to making a deal with Iran”, how will Bitcoin react?

Bitcoin held steady around $75,000 on Friday as investors digested reports that the U.S.-Iran conflict could end as early as this weekend.

According to reports, U.S. President Donald Trump reiterated that the U.S. is close to coming to an agreement with Iran, potentially bringing a permanent end to the war between the two nations.

In a statement at the White House, Trump noted that the U.S. and Iran could be meeting in Pakistan’s capital, Islamabad, this weekend. While an extension of a two-week ceasefire remains on the table, Trump suggested that it may not be needed as Iran is ready to sign a deal.

“We’re going to see what happens. But I think we’re very close to making a deal with Iran,” Trump said.

As part of its preparation for the summit, Trump had asked Israel to stop its attacks on Lebanon as a 10-day ceasefire was reportedly announced to allow negotiations to facilitate a permanent peace and security between the two nations.

The U.S. and Iran war has largely been driven by political tensions in the U.S. and has drawn significant criticism from the public ahead of the mid-term elections taking place soon.

The war in the Middle East that began on Feb. 28 has triggered the most severe oil price shock in history, fueling fears that a prolonged conflict could push the world into a global recession. 

Following Trump’s renewed optimism today, crude oil prices fell in Asian trading hours and remained below $100. Notably, Brent crude oil dropped 1.1% to $98 while WTI crude oil fell 1.3% to $93 over the past day. The drop came despite the Strait of Hormuz remaining closed, as optimism surrounding the peace talks has already started rolling through the markets.

Asian tech stocks such as Japan’s Nikkei 225 and Hong Kong’s Hang Seng were down 2% and 1% respectively after hitting a record high on Thursday.

Risky assets such as cryptocurrencies were seen printing green at the time of writing. Bitcoin, the bellwether asset, climbed a little over $75,000 after paring off some profits earlier today.

The emergence of more concrete signs of peace between the U.S. and Iran has pushed the crypto fear and greed index into neutral territory, a sign that investor concerns surrounding geopolitical instability have finally faded.

If the U.S. reaches a formal agreement with Iran this weekend, Bitcoin could swiftly rally to $80,000, the next psychological resistance level, and then potentially aim towards its path to $90,000 by Sunday.

A look at the weekly Bitcoin liquidation heatmap shows a large cluster of short positions concentrated just above $76,000. Hence, a breakout above this level could pull the price much higher as a short squeeze triggers a rapid upward move.