Bitcoin reclaimed the $106,000 mark on Monday after briefly falling below $98,500 on Sunday.
This drop marked the first time in 45 days that Bitcoin slipped under the $100,000 level.
The sudden dip was largely driven by geopolitical concerns, but a subsequent announcement by former U.S. President Donald Trump of a “total ceasefire” between Israel and Iran helped calm investor nerves.
The rebound has sparked renewed debate among traders over whether Bitcoin could push toward the $110,000 mark or whether the market remains vulnerable to further downside pressure.
Derivatives Market Holds Steady Amid Volatility
Despite Sunday’s sharp correction, Bitcoin’s derivatives market remained relatively stable.
Data shows that $193 million worth of bullish leveraged Bitcoin positions were liquidated during the decline, representing approximately 0.3% of the total futures open interest.
The overall value of open leveraged positions in Bitcoin currently stands at $68 billion, unchanged from the previous day, indicating no mass exodus of capital.
Historically, a 4.4% price drop over 12 hours is not abnormal for Bitcoin.
In fact, similar drawdowns have occurred three times in the past month alone.
However, some traders have expressed concern that a prolonged conflict involving Iran could eventually hurt the global economy and dampen investor appetite for risk.
Mining Disruption Speculation Grows
One of the more unusual developments over the weekend was an 8% drop in Bitcoin’s hashrate.
Between Sunday and Thursday, the network’s hashrate declined from 943.6 million terahashes per second (TH/s) to 865.1 million TH/s.
This led to speculation that mining operations in the Middle East might have been disrupted by escalating tensions.
While it’s difficult to confirm the exact impact on Iranian miners due to a lack of transparency, there are long-standing rumors that unlicensed mining in Iran could be consuming up to 2 gigawatts of electricity.
Analysts caution against reading too much into short-term drops in hashrate.
Daniel Batten noted that similar declines often occur due to temporary energy disruptions, particularly in the U.S., where many large mining operations are located.
A recent example took place on April 22, when the hashrate plummeted by 27% following severe weather in Texas and Oklahoma, including heavy storms and tornadoes that disrupted the power grid.
Market Eyes Federal Reserve as Oil Prices Fall
Investor sentiment improved on Monday as oil prices declined and the S&P 500 rose by 1%.
This coincided with increased expectations that the Federal Reserve may cut interest rates in the near future, especially after a retaliatory attack in Qatar added pressure to the already tense geopolitical climate.
According to CME Group’s FedWatch tool, the chance that the Fed will maintain its current interest rate of 4.25% through November has fallen to 8.4%.
A week earlier, that probability was 17.1%.
Meanwhile, the likelihood of rates dropping to 3.75% or below by November has climbed to 53%, up from 38%.
Bitcoin’s Institutional Support Remains Firm
While some market participants caution against assuming that Bitcoin will rally to $110,000 solely on hopes of Middle East de-escalation, others point to the rapid recovery as a sign of strong institutional support.
The swift rebound above $100,000 suggests that Bitcoin remains resilient even in times of global instability.
Investors continue to monitor geopolitical developments, interest rate forecasts, and hashrate trends as potential signals for Bitcoin’s next move.