Bitcoin's Recovery Hinges on US-Iran Peace Deal Amid Weak On-Chain Metrics

Bitcoin’s recovery is hinged on a successful peace deal between the US and Iran as its onchain metrics show the cryptocurrency remains weak despite its recent recovery, analysts say.

Nick Ruck, a director at LVRG Research, told Cointelegraph that despite Bitcoin (BTC) recently reclaiming $67,000, its “momentum remains weak, with declining volume and stagnant on-chain metrics indicating that the recovery lacks conviction and could quickly fade.”

He added that if a recently brokered peace deal between the US and Iran breaks down, the following geopolitical instability and potential oil shocks would see Bitcoin “face a volatile path.”

“It may initially find bids as a hedge asset before broader risk-off flows push it toward key support zones, underscoring how macro and geopolitical catalysts continue to dominate crypto price action.”

Bitcoin has recently been trading in tune with the wider market as institutions have bought up exposure to the cryptocurrency. Its recent price rise came as US President Donald Trump said on Sunday that the US had completed a peace deal with Iran to end months of conflict, which is expected to be signed on Friday.

Much of the deal remains unknown; however, Trump said it would see the Strait of Hormuz open and the US lift its blockade of the Strait and of Iran’s ports. The two countries will then begin 60 days of negotiations over Iran’s nuclear program and potential sanctions relief, the Associated Press reported on Monday.

Meanwhile, Swissblock said on Monday that Bitcoin’s price momentum, measuring the strength of its price movements, and on-balance volume (OBV), which measures buying and selling pressure, remain in a “weak momentum and participation regime.”

Price momentum and OBV remain at bear market lows. Source: Swissblock

Both indicators remain negative despite Bitcoin (BTC) recovering to reclaim $67,000 on Monday following its fall below $60,000 on June 6, with price momentum at -1, indicating weak movement strength, while OBV is at its lowest point in years at -1.7 million.

Related: Can BTC rebound to $69K as oil price plunges? Five things to know in Bitcoin this week

Swissblock said that in a typical bear market, such as what Bitcoin is currently experiencing, momentum weakens first, then OBV contracts, and price breaks lower.

However, history suggests the stronger recovery signal comes when both momentum and OBV flip back into a positive regime. “Until then, the risk of another retest of the lows remains on the table,” it said.

Bitcoin had already started to retreat from Monday’s intraday high, dropping below $66,000 in early trading on Tuesday.