US-Iran Peace Talks Deadlocked... Where Is the Lost Crypto Market Headed?

▲ Strait of Hormuz blockade, what happens to Bitcoin/ChatGPT generated image ©

As peace talks between the US and Iran have fallen into a deadlock, increasing macroeconomic uncertainty, the mixed performance of the New York stock market is also casting a strong wait-and-see attitude and downward pressure on the virtual asset market.

According to CoinMarketCap, a cryptocurrency market aggregator, on April 28 (local time), the global virtual asset market capitalization recorded a 1.82% decrease from the previous day, reaching $2.57 trillion, showing weakness. Bitcoin (BTC), the leading cryptocurrency, traded at $76,910.70, down 1.76% from 24 hours ago, surrendering the $77,000 mark. Ethereum (ETH), the second-largest by market cap, plummeted 3.28% to $2,290, and XRP (Ripple) also fell 2.61% to $1.39. Solana (SOL) and Dogecoin (DOGE) also dropped by 3.22% and 1.33% respectively, leading to a downturn across major altcoins. The Fear & Greed Index, which reflects market sentiment, pointed to 42, remaining in a tight neutral state.

This overall decline in the crypto market aligns with the mixed close of the New York stock market overnight. On the 27th, at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell by 0.13%, while the Nasdaq Composite Index closed up 0.20%, buoyed by the strong performance of some tech stocks like Nvidia, which rose 4%. The biggest reason for the overall market hesitation is that both sides have failed to find a clear compromise after the face-to-face negotiations between the US and Iran ended unsuccessfully. Iran proposed opening the Strait of Hormuz and resuming nuclear talks, but the US White House is showing caution, stating it is under internal discussion, and President Donald Trump is instead increasing pressure, claiming that the current naval blockade measures are effective.

As geopolitical risks show signs of prolongation, international oil prices are soaring daily. Brent crude, the global benchmark, surged to the $108 per barrel mark, raising concerns about rekindled inflation. This immediately led to anxiety about US monetary policy, sharply dampening investor sentiment towards risk assets. According to the CME FedWatch Tool, the probability of the benchmark interest rate remaining frozen until the end of December this year has surged to an astonishing 68.9%, significantly pushing back expectations for interest rate cuts.

Ultimately, the supply chain shocks from the Middle East conflict and surging oil prices are fueling fears of prolonged high interest rates, heavily weighing on the supply and demand across not only the stock market but also the entire virtual asset market, including Bitcoin. Faced with significant geopolitical variables, investors are extremely reluctant to aggressively expand their positions and are focusing on profit-taking and risk management.

Market experts predict that the virtual asset market will continue to be a "wait-and-see" market for the time being, lacking clear direction and fluctuating according to macroeconomic news flows. Until a dramatic breakthrough is achieved at the negotiating table between the US and Iran, or market relief regarding monetary policy is formed, a tense tug-of-war between buyers and sellers around the $76,000 mark and tests of lower support levels are expected to continue.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*