Bitcoin's Monday rally hit a wall as geopolitical realities overpowered early morning gains. After surging from the $65,000 zone to above $68,000, the top digital asset saw its momentum evaporate, pulling back to around $66,800 by 1:40 PM ET. Despite the intraday pullback, Bitcoin managed to eke out a 0.9% daily gain, but remains down nearly 6% over the past week and approximately 12% below its March 17 all-time high of $76,013.
The rapid price swings triggered massive forced liquidations, with nearly $400 million in leveraged positions wiped out over 24 hours, according to Coinglass. Long positions accounted for about $253 million in liquidations, while shorts saw $140 million liquidated. Over 86,000 traders were affected, reflecting the extreme volatility across derivatives markets.
Geopolitical Headwinds Return
The early optimism was fueled by comments from U.S. President Donald Trump suggesting possible ceasefire talks between Washington and Tehran. However, those hopes quickly faded as Iran's leadership denied any direct negotiations. Trump then escalated rhetoric by threatening to bomb Iranian nuclear facilities, deepening uncertainty. The risk of a prolonged Middle East conflict sent benchmark oil prices above $103 per barrel, adding to stagflation fears. Shipping disruptions in the Strait of Hormuz threaten to further strain global supply chains and energy prices.
Bitcoin's recent price action has undermined the “geopolitical hedge” narrative. During the final week of March, Bitcoin fell in tandem with the tech-heavy Nasdaq, reinforcing its classification as a high-beta, risk-on asset. Unlike gold, which often gains during crises, Bitcoin appears to behave more like a speculative growth stock.
Macro Focus: Nonfarm Payrolls and Stagflation Risk
Investors now pivot to Friday's nonfarm payrolls report, seen as a critical diagnostic tool for the domestic fallout from the conflict. February already showed a loss of 92,000 jobs, and a second consecutive weak print could signal that the economy is cooling faster than the Federal Reserve can adjust. Combined with energy-driven inflation, the risk of stagflation is rising—a scenario where high inflation and stagnant growth coexist, severely limiting policy options.
Bitcoin's total market cap stands at approximately $1.34 trillion, contributing to a broader crypto market value of $2.38 trillion, up 1.1% on the day. Traders remain on edge, watching both geopolitical developments and macroeconomic data for the next catalyst.