Crude oil prices collapsed, gold prices soared, and Bitcoin rose by 5%, but nobody really believed the war was over.
Written by: ChandlerZ, Foresight News
On March 23, Trump posted on Truth Social Media, announcing a five-day delay to the military strikes against Iranian power facilities, citing "very good and productive conversations" between the two sides over the past two days. Less than five minutes after this message was released, global markets reversed sharply. Brent crude oil plummeted more than 11%, falling below $100 per barrel, while spot gold surged by over $100, returning above $4400, and S&P 500 futures jumped.
Bitcoin subsequently surged from around $68,000 to a high of $71,800, a single-day increase of approximately 5%, and is currently trading at around $70,600. ETH rose from $2,050 to $2,200, and is currently trading at $2,140. Altcoin rose.
Regarding contract liquidation data, according to Coinglass, a total of $660 million was liquidated across the network in the past 24 hours, with approximately $289 million in long positions and approximately $370 million in short positions. Of this, approximately $207 million was liquidated in Bitcoin and approximately $169 million in Ethereum.
By the close, the S&P 500's gains had narrowed from 2.2% to 1.2%. The bond market's rebound also partially gave back. The market seems to have grasped the essence of the message: Trump is eager to cut his losses, but the war is far from over.
Trump said "it's settled," Iran called it "fake news," and the market only believed it for an hour.
Trump posted around 7 p.m. on the 23rd that the US and Iran had a "very good and productive conversation" on "completely resolving hostilities in the Middle East" and that the plan to strike Iranian power generation facilities had been postponed for five days.
According to Axios, Trump told reporters that his special envoys met with a senior Iranian leader and claimed that the two sides had reached an agreement on many issues. An Israeli official told Axios that US envoys Witkov and Kushner had spoken with Iranian Parliament Speaker Ghalibaf. However, Trump did not reveal the identity of the person he spoke with in Iran, saying he did not want them to be killed, but he stated that the US and Iran were aligned on many key issues.
Trump stated, "I think the person we're facing is the most respected person right now, but not the Supreme Leader, and we haven't received a message from him yet," adding that the two sides would continue talks by phone, with a face-to-face meeting possible afterward. Israeli officials revealed that the mediators are attempting to convene a meeting in Islamabad, with Kalibaf and other officials representing Tehran, and Witkov, Kushner, and possibly Vice President Vance representing the United States. The meeting could take place later this week.
Subsequently, Iran's response came point by point, and none of it matched Trump's version.
The Iranian Foreign Ministry was the first to comment, stating that Trump's remarks were "aimed at lowering energy prices and buying time for his military plans," and that the war was initiated by the US, so any requests for dialogue should be made to the US. Iranian state television's headline characterized the situation as "the US president retreating under Iran's decisive threats."
The most damaging rebuttal came from Ghalibaf himself, who stated that "there were no such talks with the United States at all, and the so-called 'fake news' is a ploy to manipulate the financial and oil markets... All Iranian officials will firmly support the Supreme Leader and the people until the goal of thoroughly punishing the aggressors is achieved."
Iran's Tasnim News Agency also denied reports of a meeting between Iranian Parliament Speaker Qassem Ghalibaf and the United States, calling it a "monumental lie" and an attempt to sow "political and social divisions" in Iran. A senior Iranian security official characterized Trump's remarks as "psychological warfare," stating that they "have long since failed."
A senior Iranian official said the war will continue until all losses are compensated.
This is the real situation where "TACO trading" is failing. Over the past year, every time Trump implemented radical policies that caused a market crash, he would turn back, imposing tariffs, threatening to annex Greenland, and attacking the Federal Reserve. Each time, the same logic was validated, causing traders to develop a conditioned reflex of buying on dips.
But tariffs can be lifted with a single order, and the blockade of the Strait of Hormuz is not a lock that Trump can open unilaterally. Tom Garretson, a strategist at RBC Capital Markets, pointed out that what will likely force Trump to act is the bond market again. Since the outbreak of the war, the yield on two-year US Treasury bonds has risen by more than 0.5 percentage points, pushing up mortgage rates and corporate financing costs. Marko Papic, chief strategist at BCA Research, said that day, "Today's statement shows that Trump realizes the real economy may be on the brink of collapse."
Brad Conger, chief investment officer at Hirtle Callaghan, put it more bluntly, saying, "This is no longer something Trump can decide unilaterally. Those who are encouraged by Trump's quick market reactions have misplaced their confidence."
The Iraq War has been going on for four weeks, and Bitcoin is still holding at $70,000.
Since the "Operation Epic Fury" launched by the US and Israel on February 28th, which resulted in the assassination of Iranian Supreme Leader Ayatollah Khamenei, Bitcoin has been trading between $63,000 and $76,000. Following the outbreak of the war, BTC initially surged by about 20%, and is currently up about 12% from its February 28th high. In contrast, gold fell 17% during the same period, and the S&P 500 and Nasdaq both dropped by more than 4%. This marks the first time recently that Bitcoin has outperformed all traditional safe-haven assets in a single major geopolitical event.
Crude oil prices have surged 53% since the outbreak of the war, fueling a rapid rise in inflation expectations and prompting markets to bet on global central banks raising interest rates. Bonds have been sold off, with the global bond market losing over $2.5 trillion in market capitalization in March, marking the largest monthly drop in three years. Bitcoin, however, has shown relative resilience compared to US stocks and tech stocks.
One of the driving forces behind this was institutional investors. The Coinbase Bitcoin Premium Index turned positive for the first time in 40 days on March 2. US spot Bitcoin ETFs saw net inflows for four consecutive weeks, with a net inflow of $1.1 billion in the three trading days from March 2 to 4, one of the largest single inflow periods of the entire quarter. BlackRock's iShares Bitcoin Trust (IBIT) accounted for more than half of the inflows over those three days, attracting approximately $652 million.
However, entering mid-to-late March, on-chain data showed a clear cooling trend. A Glassnode report showed that weekly net inflows into spot ETFs fell from $791.1 million to $152.6 million, a drop of over 80%; ETF MVRV fell from 1.27 to 1.12, compressing profit margins for institutional holdings and increasing downside sensitivity. On-chain active addresses remained around 630,000, near the lower end of the statistical range, indicating a significant slowdown in on-chain capital rotation and a more defensive capital structure.
Hot Capital Share (the proportion of recently entered capital) fell to 21.9%, while the short-term holder supply ratio (STH/LTH) remained at 16.7%, indicating that the market is essentially dominated by long-term holders, with low participation from new capital. The 25-Delta Skew in the options market rose to 14.03%, with put option premiums continuing to rise, suggesting increasing hedging demand.
The Realized Cap Change narrowed from -1.1% to -0.8%, indicating a slowdown in net capital outflows, but it remains negative, suggesting that selling pressure has not yet substantially reversed. Glassnode concludes that "the market is entering a consolidation phase, with softening activity, defensive positioning, and initial signs of stabilization in both spot and derivatives markets."
As long as Hormuz remains closed, nothing is over.
Trump announced a five-day delay, with the negotiation window now covering this week. According to Reuters, Vance, along with special envoys Vitkov and Kushner, may meet with Iranian officials in Islamabad as early as this week, with Pakistan playing a mediating role.
The market's biggest concern is whether the Strait of Hormuz will reopen. This waterway, carrying about one-fifth of the world's oil and liquefied natural gas shipments, remains closed. Until then, the recent single-day drop in oil prices is merely a respite, inflationary pressures on bond yields will not subside substantially, and the Federal Reserve's room for interest rate cuts will not expand. For Bitcoin, geopolitical uncertainty is both suppressing its momentum to break through $76,000 and forming a support level below.
Five days from now, the market may have an answer.
