Key takeaways
- BTC is up 4% and is now trading above the $66,500 level.
- The rally comes following reports of a preliminary peace agreement between the United States and Iran.
Bitcoin extends recovery following geopolitical breakthrough
Bitcoin (BTC) has surged above $66,600 on Monday after gaining 4% during the previous week, supported by improving global risk sentiment following reports of a preliminary peace agreement between the United States and Iran.
The easing of geopolitical tensions helped lift risk assets across financial markets, providing additional momentum for Bitcoin’s recovery after weeks of heightened uncertainty.
However, despite the rebound in price, institutional demand remains under pressure, with spot Bitcoin exchange-traded funds (ETFs) recording another week of net outflows.
Investor sentiment improved significantly after officials from both countries signaled progress toward a diplomatic resolution.
Iran’s Supreme National Security Council confirmed that Tehran had finalized a Memorandum of Understanding (MoU), stating that military operations across all fronts, including Lebanon, would cease immediately and permanently.
On the U.S. side, President Donald Trump announced via Truth Social that he had authorized the reopening of the Strait of Hormuz and the removal of the U.S. naval blockade.
Further optimism emerged after Pakistan Prime Minister Shehbaz Sharif stated that the finalized agreement is expected to be signed in Switzerland on Friday.
Iranian Deputy Foreign Minister Kazem Gharibabadi also indicated that broader negotiations would continue during a proposed 60-day ceasefire period, with sanctions relief and Iran’s nuclear program expected to be key discussion points.
The developments have reduced fears of a wider regional conflict, encouraging investors to rotate back into higher-risk assets such as cryptocurrencies.
Institutional demand continues to weaken
Despite improving macro sentiment, institutional flows remain a concern for Bitcoin bulls.
Data from SoSoValue shows that U.S. spot Bitcoin ETFs recorded net outflows of approximately $315.84 million last week, marking the fifth consecutive week of withdrawals since mid-May.
The persistent outflow trend suggests that institutional investors remain cautious, even as broader market sentiment improves.
Continued ETF selling could limit Bitcoin’s upside potential and increase the risk of renewed volatility if retail demand fails to offset institutional withdrawals.
Bitcoin’s technical outlook shows improving momentum
The BTC/USD 4-hour chart has flipped bullish as Bitcoin’s short-term momentum has improved, but the broader trend remains challenged.
BTC is currently trading above key support levels after recovering nearly 4% last week. However, the cryptocurrency remains below its major moving averages and a previously broken ascending trendline, indicating that the larger market structure remains bearish.
Momentum indicators are beginning to improve. The Moving Average Convergence Divergence (MACD) has turned positive, while the Relative Strength Index (RSI) has climbed to around 71.
While these signals suggest stabilization, they are not yet strong enough to confirm a full trend reversal.
If the recovery continues, Bitcoin could surge past the 50-day EMA of $70,704 in the near term. A daily candle close above this level could allow BTC to extend its rally towards the $73,412 (100-day EMA) resistance point.
However, if the bears regain control, the first major support level sits near $64,004. A break below this area could revive bearish pressure and increase the likelihood of a deeper corrective move despite recent signs of stabilization.
For now, Bitcoin remains caught between improving macro sentiment and weakening institutional participation.
