Bitcoin hit $65,480 on June 14, climbing sharply after the United States and Iran signed the Islamabad Declaration, ending over 100 days of military conflict. The rally triggered a flood of liquidations — $246 million in crypto short positions were wiped out within 24 hours — as traders rushed to price in a suddenly different outlook for Federal Reserve policy.
The deal that moved markets
The Islamabad Declaration did more than stop the fighting. It included an immediate lifting of the US naval blockade on the Strait of Hormuz, the chokepoint through which about 20% of the world's oil supply passes. Within a day, oil prices dropped more than $12 a barrel. That's a direct hit on inflation expectations — and a big reason why crypto traders started betting on rate cuts.
Short squeeze in crypto
The $246 million in liquidations hit shorts across Bitcoin and other major tokens. The move wasn't quiet. Bitcoin's run to $65,480 came on heavy volume, and the squeeze forced a cascade of covering that amplified the price jump. For a market that had been grinding sideways through months of geopolitical uncertainty, the peace deal was a pressure release valve.
Why the Fed matters now
The Federal Reserve's upcoming meeting was supposed to be about holding rates or even hiking. Falling energy prices change the calculus. Cheaper oil reduces headline inflation, and that gives the Fed room to consider cuts instead. Traders are now pricing in a higher probability of a dovish pivot — a sharp reversal from just a week ago. The next meeting is later this month, and all eyes are on the statement.
The oil price slide is still settling, and the Strait of Hormuz reopening will take days to fully normalize shipping. For crypto, the key question is whether the Fed follows through on the rate-cut scenario the market is now discounting. The June 30 meeting is the next concrete date on the calendar.
