Bitcoin Eyes $80K Short Squeeze on US-Iran Peace Optimism

Bitcoin rebounded from a dip below $75,000 to trade around $77,000 as traders positioned for a possible short squeeze toward $80,000, driven by optimism about a potential US-Iran peace agreement and about 16,000 BTC of inflows to Binance over the past month.

The weekend sell-off pushed Bitcoin to its lowest levels since mid-April before buyers stepped in. Some market participants described the intraday decline as a liquidity sweep. The account Cryptic Trades on X characterized the drop as a “fakeout,” saying price briefly violated higher-timeframe support tied to April lows. Daan Crypto Trades wrote that reclaiming the daily bull-market support band would be needed to confirm bullish momentum on shorter time frames.

Lennaert Snyder called the sub-$75,000 print a “very nice liquidity sweep” and said a strong daily close after the sweep supports a retest of the $79,000–$80,000 area. Trader CW pointed to concentrated short positions above $80,000 and identified notable short pressure up to about $80,500, noting that a further rise could force short covering.

Expectations that a US-Iran peace deal may be near lifted risk assets. US stock futures rose at the weekly open and major indices reached record highs, Japan’s market gained about 3.5%, and West Texas Intermediate crude traded near $90 a barrel. Analyst Michaël van de Poppe wrote that Bitcoin could move above $80,000 if a deal takes effect.

On-chain analytics showed a surge of Bitcoin moved onto Binance over roughly ten days, with a single-day peak above 3,600 BTC on May 18 and net inflows of about 16,000 BTC for the month. Analytics contributors noted that sustained inflows to a major exchange are frequently associated with intentions to sell, whether for profit-taking, reducing exposure, or repositioning.

Other indicators pointed to weaker spot demand. US spot Bitcoin exchange-traded funds reported cumulative outflows exceeding $1.74 billion. The Coinbase Premium, a spread used as a proxy for US institutional demand, turned deeply negative. Open interest in futures remained well below late-2025 highs even as funding rates were positive, indicating crowded long positions.

Inflation data and Federal Reserve commentary added policy risk. The Personal Consumption Expenditures index for April is due this week and will reflect recent oil-price moves linked to Middle East developments. Federal Reserve Governor Christopher Waller said “inflation is not moving in the right direction” and that officials “can no longer rule out rate hikes further down the road.” Market pricing shows little expectation of rate cuts before 2027.

Traders are watching the $79,000–$80,500 range for signals that short-covering will extend the rally or that limited spot liquidity and weak institutional buying will cause prices to reverse.