Kyle Rodda, Senior Financial Market Analyst at Capital.com, warned that Bitcoin (BTC) is facing 'binary risk' now that President Trump has given Iran an ultimatum for Tuesday at 8:00 PM ET. This forces traders to choose between full escalation or relief.
The Bitcoin price dropped on Tuesday below $69,000, after briefly exceeding $70,000 the previous day. Iran rejected a 45-day ceasefire proposal and Trump called the deadline 'final'.
Trump's fourth deadline and the crypto reaction
Trump demands that Iran reopen the Strait of Hormuz, otherwise he threatens attacks on any bridge and power plant in the country. This is the fourth time since March 21 that the president has extended and adjusted his ultimatum.
A fifth delay is still possible if Trump thinks a deal is coming, but on Monday he said it is "very unlikely" that he will delay again.
Rodda told BeInCrypto that markets are in a wait-and-see mode, anticipating one of two outcomes.
"The attacks are happening, things are escalating, or they are not happening and then there is a huge relief rally. Bitcoin continues to move within a range, between about $60,000 and $75,000," said Rodda.
He added that strong escalation would negatively impact BTC due to rising US interest rates and a stronger dollar. Both consequences of rising oil prices.
The US Dollar Index (DXY) hovers around 100 and seems ready for a breakout, which aligns with Rodda's warning.
The structure of the DXY resembles earlier patterns from 2014 and 2021, which preceded prolonged Bitcoin price declines.
"If the DXY breaks up, USDT dominance will likely rise as well... which means Bitcoin will probably make the next step down," said analyst Kyle Doops.
Still, Rodda also pointed out resilience beneath the surface.
"It must be said that Bitcoin has remained remarkably resilient, and there are cautious, but not yet confirmed signals that a bottom is in sight," he said.
A bear flag in time
The technical structure creates additional urgency. The Bitcoin price has been consolidating for about 60 days within a bear flag pattern. This is similar to the previous bear flag pattern of 54 days, before the price broke down.
It is noteworthy that the declining volume within the pattern makes it difficult to trust rallies.
The daily trading volume on crypto exchanges has fallen back to levels not seen since the FTX crash. This shows that sentiment has dropped to historical lows.
Oil also acts as a leading indicator. Crude oil has tested resistance four times, and a breakout towards $128 per barrel would put pressure on risky assets, including BTC.
Institutional inflows and decreasing volatility
Furthermore, analysts at QCP Capital note that markets are responding less and less to Trump’s repeated escalation deadlines after four consecutive extensions.
The oil price has softened somewhat and stock futures remain stable, indicating that immediate concerns about an attack have diminished.
Institutional demand remains positive. Spot Bitcoin ETFs saw a net inflow of $1.32 billion in March. This is the first positive month since October 2025, after four months of outflow.
Strategy has also begun accumulating BTC again after a brief pause.
In the options market, implied volatility has dropped to its lowest level since the start of the conflict on February 28. The skew is also normalizing, indicating that demand for hedging has decreased despite geopolitical risk.
Data from Polymarket shows that traders assign only a 3% chance to a ceasefire by April 7, rising to 30% by April 30.
There are also reports that Trump may delay the deadline again if a deal is nearly in place. This adds another variable to an already simple situation.
Whether there are attacks on Tuesday or another extension takes place, BTC's reaction will show whether the cautious bottom signals that Rodda has found hold up during both a geopolitical crisis moment and a bear flag that is nearly at its end.