The Bullish Reason Bitcoin Is Brushing Off Geopolitics
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| By Juan Villaverde |
At least up to now, as far as Bitcoin (BTC, “B+”) and crypto markets are concerned, the war in Iran has produced plenty of smoke.
But not much fire.
Early Saturday, when news broke that the conflict was intensifying, Bitcoin sold off to about $63,000 before 12 noon Eastern.
But this wasn’t a rational move. It was a classic knee-jerk reflex. We know that because it quickly clambered back up to $67,500 by the end of the trading session.
Not only is that move well within its trading range going back four weeks. But BTC has moved upward in the trading days since.
As of writing, Bitcoin sits just under $69,000 after climbing as high as $73,600 yesterday.
Simply put, Bitcoin barely reacted to extremely negative geopolitical news. Yet it responded quite strongly to positive developments.
My interpretation? This market is done selling. Plain and simple.
Admittedly, this conclusion is based purely on technical behavior. Bitcoin barely moved on news that Iran had been bombed. Yet it rallied strongly on reports that Iran’s Supreme Leader had been killed.
Which of those headlines should matter more?
A “rational” reaction would have been a crash when conflict broke out. Followed by a modest bounce on signs that the conflict might be short-lived.
Instead, the opposite occurred.
That tells me loud and clear that sellers have left the building. And only buyers remain.
Adding fuel to the fire, market positioning remains heavily short.
Perpetual swap markets — where most leveraged speculation occurs in crypto — continue to dominate price action. Until recently, traders were actually paying to stay short, an unusual situation.
In other words, many traders remain convinced Bitcoin is still headed under $50,000.
But positioning is a contrarian indicator. When everyone expects a crash, markets tend to surge.
Just look at how the market responded to the news that President Trump is sending the U.S. Navy to secure the Strait of Hormuz after Iran’s military announced its closure on Tuesday.
Bitcoin barely reacted to negative news. Yet responded very strongly to positive developments.
That tells you everything about the current market psychology.
And it’s playing well into the market’s fundamental setup. Liquidity has been rising for months. And over that time, Bitcoin has barely reacted.
This helps explain the market’s behavior: The underlying trend is now decisively higher.
This market wants to rally. It wants to price in the surge in liquidity.
That’s why I believe this situation will ultimately resolve higher. The market behavior this week supports that view.
Does that mean we ignore developments in the Middle East?
Of course not.
But I think Bitcoin would already be trading much higher if not for geopolitical uncertainty. There is certainly a scenario where prices fail to rally as strongly as they otherwise would in a peaceful environment.
Which means for now, we should consider the geopolitical environment as a near-term headwind for crypto.
I say near-term because I don’t believe President Trump has the political capital to sustain a months-long conflict. Especially in a midterm year.
A quick look into recent history supports this outlook: Every military confrontation initiated during his presidency has ended quickly — usually with a negotiated settlement.
The last time we saw something similar was the 12-Day Israel-Iran War of June 2025. Back then — just like this week — Bitcoin barely reacted when conflict initially escalated. In fact, it had already been selling off since late May.
Yet when the conflict ended surprisingly quickly, the market rallied with strength for more than a month.
I expect a similar outcome this time.
Because, just like last year, the underlying macro fundamentals remain supportive of higher prices, not lower.
With Bitcoin back under $70,000, this could be your last chance to enter at these lower prices for a while.
Your window to act won’t stay open for long.
Best,
Juan Villaverde
P.S. To see what my Crypto Timing Model forecasts for Bitcoin and the top altcoins this cycle, click here.
