Bitcoin (BTC) remains below 70,000 USD on Tuesday as traders weigh conflicting signals from Trump's ultimatum regarding Iran against positive ceasefire negotiation reports
The deadline of 8:00 PM ET set by President Trump for Iran to reopen the Strait of Hormuz has turned Tuesday into a bifurcated event for risk assets
The war signals dragged BTC in both directions
Vice President JD Vance said on Tuesday that the war will end in “not long” and military objectives have been achieved
Meanwhile, a senior U.S. official informed Fox News that Washington is in direct contact with Tehran, explaining that the talks are “positive” and there may be significant progress before the end of the day
However, Trump posted on Truth Social with a clearly different tone, warning that “civilization will die tonight,” claiming that a “complete regime change” had already occurred
All civilizations will die tonight, there is no way to bring them back. I don’t want this to happen, but it probably will… we will find out tonight. This is one of the most important moments in the long and complex history of the world, as Trump said in his post
The post mentions 47 years since the Islamic Revolution in Iran in 1979
Anthony Scaramucci, the former White House communications director, called this statement a veiled nuclear threat
The group that does not believe in the hawkish group creates a binary trading condition
But not everyone interprets Trump’s words literally. Macro commentator Rational Aussie argues that the escalation of language indicates a weak bargaining power, not genuine intent
They predict that Trump will extend the deadline overnight, and the market will come back to life from the change of heart, which traders call this phenomenon “TACO Tuesday” or “Trump Always Chickens Out“
Trump will Taco… his words will become increasingly confusing when the situation is worst for him – that’s how he negotiates. He needs to make everyone believe that he has no plan anymore… he tries to create a nonexistent bargaining power by artificially creating the rarest thing, which is the fear of outcomes. I predict that when I wake up in the next 8 hours, I will see headlines like ‘We are almost issuing an order’ which they have written
Meanwhile, Iran itself is not quietly backing down either, as a senior Iranian source said that if the situation is uncontrollable, Tehran’s allies will close the Bab El-Mandeb Strait
This chokepoint in the Red Sea is an important route for transporting goods to Europe, and it is already threatened by the Houthi group's disturbances
The closure of the Strait of Hormuz has reduced global oil exports by about 20%, causing Brent oil prices to soar above 110 USD per barrel
If Bab El-Mandeb must be closed at the same time, it will exacerbate the problems occurring in terms of energy, fertilizer, and shipping costs
Bitcoin opened the market on Tuesday at 68,860 USD, down 0.2% from Monday, having touched 68,200 USD before recovering and is now trading at 68,392 USD as I write this article
The fear and greed index remains at extreme fear for over a month now
If it passes the deadline without escalating tensions, the idea of “TACO” will still hold true, and there is a chance of buying back to ease
But if there are additional attacks on civilian infrastructure, there may be continued selling pressure leading to a position washout, pushing BTC down to test the support zone of 66,000 USD like last week
Traders have only a few hours left to see how it will unfold tonight