Key takeaways
- Bitcoin rose 4% and is now trading above the $66,500 level.
- This gathering comes in the wake of reports of a preliminary peace agreement between the United States and Iran.
Bitcoin is extending recovery after geopolitical breakout
Bitcoin (BTC) rose above $66,600 on Monday after rising 4% over the previous week, supported by improving global risk sentiment following reports of a preliminary peace deal between the US and Iran.
An easing of geopolitical tensions has helped lift risk assets across financial markets, providing additional impetus to Bitcoin’s recovery after weeks of heightened uncertainty.
However, despite the price rebound, institutional demand remains under pressure, with Bitcoin exchange-traded funds (ETFs) recording another week of net outflows.
Investor sentiment improved significantly after officials from both countries indicated progress toward a diplomatic solution.
Iran’s Supreme National Security Council confirmed that Tehran has finalized a memorandum of understanding stipulating that military operations on all fronts, including Lebanon, will cease immediately and permanently.
On the American side, President Donald Trump announced on the Truth Social channel that he had allowed the reopening of the Strait of Hormuz and the lifting of the American naval blockade.
More optimism emerged after Pakistani Prime Minister Shehbaz Sharif said the final agreement was expected to be signed in Switzerland on Friday.
Iranian Deputy Foreign Minister Kazem Gharibabadi also indicated that broader negotiations would continue during the proposed 60-day ceasefire period, with sanctions relief and Iran’s nuclear program expected to be key points of discussion.
These developments have reduced fears of a broader regional conflict, encouraging investors to return to riskier assets such as cryptocurrencies.
Institutional demand continues to weaken
Despite improving overall sentiment, institutional inflows remain a concern for Bitcoin bulls.
Data from SoSoValue shows that U.S. spot bitcoin ETFs recorded net outflows of about $315.84 million last week, marking the fifth straight week of withdrawals since mid-May.
The continued 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.
The technical outlook for Bitcoin shows improving momentum
The 4-hour BTC/USD chart has turned higher as Bitcoin’s short-term momentum improves, 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 key moving averages and the previously broken uptrend line, suggesting that the larger market structure remains bearish.
Momentum indicators are starting to improve. The Moving Average Convergence Divergence (MACD) indicator turned positive, while the Relative Strength Index (RSI) rose to around 71.
While these signals indicate stability, they are not yet strong enough to confirm a complete trend reversal.
If the recovery continues, Bitcoin could surpass the 50-day moving average 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 resistance point (100-day EMA).
However, if the bears regain control, the first major support level is located 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 stuck between improving overall sentiment and weakening institutional engagement.
