Bitcoin slipped below $71,000 for the first time in weeks, triggered not by Fed policy but by a dramatic shift in Middle East geopolitics. After heavy pressure from President Donald Trump, Israel agreed to launch direct negotiations with Lebanon — but made clear it would not cease fire during talks. The “fight while talking” stance immediately enraged Iran, reviving threats to abandon peace negotiations and block the strategic Strait of Hormuz.
Trump’s Ultimatum: ‘Calm Down’ on Lebanon
According to Axios, Israeli Prime Minister Benjamin Netanyahu announced on Thursday that he instructed his cabinet to begin direct talks with Lebanon as soon as possible. The shift followed a phone call with Trump and White House envoy Steve Witkoff, who reportedly told Netanyahu to “calm down” and halt heavy airstrikes on Lebanon.
Netanyahu’s statement said, “Given Lebanon’s repeated requests for direct negotiations, I directed yesterday to start them as soon as possible.” He emphasized that the talks would focus on disarming Hezbollah and establishing peaceful relations, and praised Lebanon’s prime minister for proposing to demilitarize Beirut.
No Ceasefire: Israel Ramps Up Strikes, 254 Dead
Yet diplomacy did not pause the fighting. A senior Israeli official told Axios: “There will be no ceasefire in Lebanon. Talks with the Lebanese government will begin in the coming days.” In fact, within 24 hours of the U.S.-Iran temporary truce, Israel intensified its bombardment of Lebanon. Lebanese civil defense reported at least 254 deaths from Wednesday’s airstrikes. The U.S. and Israel insisted that the U.S.-Iran ceasefire does not cover Israel’s operations against Hezbollah.
Iran accused both nations of violating the truce, threatening to withdraw from upcoming peace talks and to once again blockade the Strait of Hormuz, a critical chokepoint for global oil. The renewed brinkmanship erased the cautious optimism from earlier U.S.-Iran negotiations and pushed risk assets lower.
Washington Talks Next Week: Three Ambassadors at the Table
Despite the clashes, diplomatic channels remain open. Direct Israeli-Lebanese negotiations are expected to start next week at the U.S. State Department in Washington. The meeting will be led by U.S. Ambassador to Lebanon Michel Issa, with Israeli Ambassador to Washington Yechiel Leiter and Lebanese Ambassador Nada Hamadeh-Moawad representing their countries. The outcome will be pivotal in determining whether the region tips into a full-scale war.
Bitcoin showed no immediate rebound after breaching $71K. Oil prices have already spiked on supply disruption fears, and if Iran follows through on its threats, both energy costs and safe-haven flows could further pressure crypto markets.