The fluctuating situation between the US and Iran triggers volatility in the crypto market: an analysis of Bitcoin's rise, fall, and rebound in the bulls and bears battle

U.S. President Trump officially rejected Iran’s proposed peace agreement response on May 10, 2026, saying it was “completely unacceptable.” Iran’s core demands include lifting sanctions, the U.S. military immediately lifting the naval blockade, releasing frozen assets, and ensuring Iran maintains control over the Strait of Hormuz. After Trump rejected the relevant terms, uncertainty in the Middle East sharply intensified.

This geopolitical signal triggered a three-phase price chain reaction in the crypto market. According to Gate market data (as of May 11, 2026), within 45 minutes after Trump’s post, Bitcoin rapidly fell from $81,430 to $80,520—marking the first wave of decline. The market initially reacted immediately to the “hope for peace being dashed,” and risk-averse sentiment drove short-term funds to exit. Then, in less than three hours, Bitcoin reversed and surged by about 2.3%, reaching a high of $82,400. Finally, after the Asian Monday trading session opened, Bitcoin fell again to around $81,530.

The underlying structural causes of these three phases are not attributable to a single factor. The initial drop was driven by profit-taking by bulls and panic selling caused by fundamental uncertainty; the rebound was directly related to the forced liquidation of approximately $64 million in short positions. As the price recovered, it wiped out opposing positions, creating a liquidity feedback loop. The second decline reflects, to a greater extent, market re-pricing after liquidity recovered in the Asian session, as well as concentrated profit-taking by some short-term traders at the rebound high.

Does Bitcoin in a sudden geopolitical incident act as a risk asset or a safe-haven asset?

Based on the data from this price move and historical comparisons, Bitcoin in sudden geopolitical incidents is closer to a risk asset rather than a traditional safe-haven tool like Gold. U.S. stock index futures rose about 0.13% roughly two hours after Trump’s post, while oil prices surged 4.6% to $98.7 per barrel. Bitcoin’s rebound path closely overlapped in timing with the relatively mild recovery of stock index futures, but it contrasted with oil’s performance.

Historical data provides even stronger support. Since the conflict erupted on February 28, Bitcoin has gained approximately 29.7%, outperforming the S&P 500 and Gold over the same period. However, this was driven by the combined effect of multiple fundamental factors—not simply because the market viewed Bitcoin as a safe haven. Those factors include continued net inflows of ETF funds, improved expectations for the regulatory environment, and the strategic reserve narrative. In an earlier example of a geopolitical conflict, in June 2025 an Israeli raid on Iran caused Bitcoin to plunge by about 3,000 points in a single day; over the same period, Gold rose by about 0.8%. Instead of flowing toward Bitcoin, risk-averse funds flowed into liquidity-stronger traditional safe-haven instruments such as the U.S. dollar and U.S. Treasuries. The current macro correlation structure of Bitcoin still remains more linked to U.S. equity risk assets than to Gold as a substitute.

How to break down the mechanism between Trump’s social media posts and Bitcoin’s volatility

Trump’s Truth Social has become one of the most important micro catalysts in the crypto market. The “completely unacceptable” post in this event is not an isolated case; it further validates the ongoing linkage pattern between his social media activity and the crypto market.

According to quantitative lookbacks of past cases (data sourced from publicly available third-party market statistics), after Trump first made critical comments about Bitcoin in July 2019, BTC fell 7.1% within 45 minutes. After the October 2025 announcement of 100% tariffs on China, Bitcoin crashed by about 12.4% within two hours, triggering $19.38 billion in liquidation events. After signals of peace negotiations were issued in April 2026, Bitcoin rose 6.2% within 30 minutes. Meanwhile, before major diplomatic announcements in March 2026, the crude oil and stock index futures markets showed abnormally concentrated trading volume, and some accounts made profits ranging from several hundred thousand to several million dollars within a few hours.

Mechanistically, the pricing impact of Trump’s posts transmits through three channels. First is the immediate liquidation channel: leverage positions in derivatives markets are rapidly cleared amid high volatility. Second is the narrative channel: geopolitical signals change market expectations about the duration and severity of conflicts. Third is emotional transmission: real-time viewpoints on social media directly affect retail traders’ trading decisions. Together, these three form a highly direct transmission chain from social platforms to the trading engine.

How to build a risk management framework for short-term trading using geopolitical news

From the statistical characteristics of historical events, an operational analysis framework can be abstracted. The core time parameter is called the “tweet window,” meaning the time gap between when Trump releases a message and when the market completes its first round of trend pricing.

Looking back at the patterns of six major past events, 45 minutes is a frequently appearing time parameter. The first wave of decline after criticism in 2019 took about 45 minutes. In this event on May 11, 2026, the initial decline phase also lasted about 45 minutes. This time window has statistical reference value—it roughly corresponds to the time needed for message dissemination to trading groups across different time zones, algorithmic strategies to identify new signals, and complete initial pricing. The second key parameter is typically in the 2–3 hour range, which is usually the time window when reverse shocks driven by leverage liquidation occur. In this event, short liquidations triggered a rebound that lasted about three hours throughout the move.

Based on the above features, short-term participants trading crypto markets driven by geopolitical factors should follow the following principles. First, “betting on Trump’s direction is betting on a KOL’s emotions”—in geopolitical news-driven market moves, not betting on direction but managing volatility is the strategy with a statistical edge.

How the second decline reveals market fragility after a liquidity pullback

The second drop from $82,400 to $81,530 in Bitcoin actually reveals a more structural issue worth paying attention to in geopolitical news trading: when systemic liquidity recedes, the market becomes easier to break through with new negative signals.

This second decline occurred after the Asian Monday trading session opened and, within about 7 hours, it gave back most of the gains from the weekend. Approximately $400 million in liquidation events over the past 24 hours globally indicates that leverage trading has pushed the market to a fragile equilibrium point—any new bearish signal could trigger a chain reaction.

From a broader perspective, oil prices rising to $98.7 per barrel are exerting a structural impact on macroeconomic narratives. The Strait of Hormuz carries about one-fifth of global oil trade. Continued blockades mean that energy inflation pressures will be transmitted step-by-step through the supply chain to core economies, which in turn affects the interest-rate policy path of the Federal Reserve. As a rate-sensitive risk asset, Bitcoin will face ongoing macro pressure along the transmission chain of high oil prices → high inflation → prolonged tightening expectations.

What this week’s macroeconomic agenda means for the crypto market under geopolitical shocks

While Bitcoin holds above $80,000, this week the challenge is not only geopolitical uncertainty, but also a series of macroeconomic data releases. The U.S. Senate will hold a confirmation vote on Monday for Kevin Warsh to take over as Fed Chair. On Thursday, the Senate Banking Committee will review the CLARITY Act. Bitcoin spot ETFs have shown net inflows for six consecutive weeks; in the previous week alone, they attracted about $622 million, and institutional demand continues to provide foundational support.

On May 13 (Tuesday), April CPI data will be released, followed by May 14 PPI and OPEC’s monthly production outlook, and then May 15 retail sales and May 16 industrial production data. If CPI comes in above expectations, the Federal Reserve may be forced to maintain a tightening posture, and the negative impact of high oil prices on risk assets will be amplified further.

From a technical perspective, $80,000 is the key level for short-term longs and shorts to fight over. If this support fails, the next downside target to watch is around $78,000. Overall, Bitcoin at its current level faces a complex situation with overlapping pressure from both geopolitical uncertainty and macro data.

Summary

Trump’s rejection of Iran’s peace agreement proposal presents a complete reaction model of the crypto market under geopolitical shocks: a 45-minute panic initial drop → a rebound driven by 2–3 hours of leverage liquidation → a secondary repricing decline after liquidity recovery. Bitcoin’s behavior during this process is more akin to a risk asset than to a traditional safe-haven instrument. For traders, optimizing position management, setting dynamic stop-losses, and avoiding bets on a single one-sided direction are fundamental principles for maintaining survival ability in a high-frequency geopolitical shock environment.

FAQ

Q: After Trump rejected the Iran peace agreement, what were Bitcoin’s specific price movements?

According to Gate market data (as of May 11, 2026), Bitcoin fell from $81,430 to $80,520 within 45 minutes after Trump’s post. It then rebounded to about $82,400 within roughly three hours, and finally retreated to around $81,530 during the Asian trading session.

Q: What is a “news trading” strategy in the crypto market?

A news trading strategy refers to short-term operations that use the market’s rapid repricing of prices after major events or policy news are released. Its core is understanding the initial price-discovery window driven by news, which is usually between 45 minutes and 3 hours. This strategy does not make directional predictions about the event outcome; instead, it manages liquidity based on the time difference between the nature of the news and the market’s price reaction.

Q: During geopolitical conflicts, does Bitcoin lean more toward risk assets or safe-haven assets?

Based on this event and historical data, Bitcoin behaves more like a risk asset. Its price trend shows a much clearer correlation with U.S. stock index futures than with Gold. In the case of the escalation of the Middle East conflict in June 2025, Bitcoin’s one-day plunge came alongside a modest rise in Gold, and funds were more inclined to flow toward the U.S. dollar and U.S. Treasuries.

Q: How can I use Trump’s social media posts to manage risk?

Key principles include: pre-setting stop-loss levels before opening positions; not rushing to chase or sell after the completion of first-wave pricing in the 45-minute window; and avoiding establishing heavily concentrated one-sided positions immediately after a single message. Historical data shows that volatility driven by Trump’s posts often triggers a secondary repricing caused by leverage liquidation within 2–3 hours, during which the risks on both the long and short sides are high.

Q: What other events this week could affect Bitcoin’s price action?

This week, you should watch the release of CPI data on May 13, the Senate’s confirmation vote for Kevin Warsh as Fed Chair, and the Senate Banking Committee’s review of the CLARITY Act. If CPI exceeds expectations, inflation pressures triggered by high oil prices may extend the Federal Reserve’s tightening cycle, exerting macro pressure on risk assets such as Bitcoin.