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Bitcoin rallied sharply alongside broader risk-on assets following news of a conditional US–Iran ceasefire.
The announcement came just 90 minutes before President Trump’s Tuesday 8pm ET deadline – avoiding an ultimatum for Iran that had raised the risk of further escalation if terms were not met.
The fragile agreement, which stipulated the immediate reopening of the Strait of Hormuz, helped trigger a relief rally in crypto assets. BTC even posted a 3-week high and recovered back above $70K as the geopolitical risk premium eased.
The recovery in BTC spot, alongside rising open interest, suggests that market participants are actively adding risk as macro conditions improve.
Crypto led the move overnight, outperforming traditional assets as markets repriced lower near-term tail risks.
While liquidations did contribute (with data showing that ~$56M cleared on Bybit BTC perpetuals), derivatives data suggests the rally was not driven purely by forced closure of bearish positions.
Open interest increased alongside the price move, indicating fresh positioning rather than a purely mechanical unwind of shorts positions.
Funding rates also remained relatively contained, lacking the sharp spikes typically associated with aggressive positioning shifts.
Block Scholes’ Risk Appetite Index measures the level of euphoria (above 1) or panic (below -1) in the spot market. Momentum in this index shows a strong relationship to spot returns.
As President Trump’s Tuesday 8pm ET deadline quickly approached, the President announced at 6.32pm ET that Iran had agreed to a “double sided CEASEFIRE" of two weeks, a period in which the two states could reach terms for a lasting peace deal and end the war in the Middle East.
Crucially for US and western interests, one of the conditions of the ceasefire was “the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz” to international commercial traffic.
The prospects of ending Iran’s chokehold of a vitally important shipping lane for oil exports from the Gulf region were broadly celebrated by markets.
The move across assets actually preceded the post by some minutes as:
READ MORE (published Wed, April 8): US-Iran Ceasefire Triggers Spectacular Moves
However, while Coinglass sources indicate that up to $56M of short positions were liquidated on Bybit's BTC perps, the sharp repricing of risk higher was not driven solely by the forced closure of short positions.
Open interest (while strongly depressed from its October 2025 highs of ~$18B) actually appears to have increased since the move, rather than fall dramatically in the way we saw in historically significant liquidation events such as Oct 10, 2025.
We see this in the chart above, which displays the open interest levels of the perpetual swaps with the largest OI levels on the Bybit exchange.
This suggests that there was not the same magnitude of build up of highly-levered short positioning in these perps.
Funding rates of those same perpetual swap contracts paint a similar picture.
While average funding rates have indeed been depressed since the initial strikes on Iran on Feb 28, 2026 (and for some tokens more than others), there was not a sharp spike higher that we would expect from the liquidation of short positions.
Option markets have also priced out much of the case for a drawn-out war.
As shown in the chart above, which shows that the premium assigned to puts (i.e. a negative 25-delta skew) has narrowed notably since the news broke. Not only is that move at short tenors in reaction to the immediate spot rally – puts at tenors up to 3 months are all trading with less of a relative premium.
However, no tenor has flipped to bullish, suggesting a see-it-to-believe-it approach to promises of lasting peace and conditions sustainably favourable to a broader risk-on rally.