BTC Relief Rally, But Is Pain Over?

Hey Friend!

The market got its drama right on schedule.

Hours before the deadline, the U.S. and Iran stepped back from the ledge and landed on a two-week ceasefire. Oil immediately lost its war premium, equities caught a bid, and crypto finally got a reason to stop trading like it had one eye on the chart and one eye on a missile map.

That gave us the kind of move traders love and distrust at the same time: sharp, clean, and headline-driven.

Because yes, the relief is real. BTC pushed back toward the low $70Ks, ETH and alts followed, and sentiment improved fast. But let’s not get carried away. This wasn’t the market discovering a new bull case. It was the market getting permission to breathe again.

Let’s get into the broader picture and how to set up for the coming weeks.

1. 📈 Market Update – The U.S.–Iran ceasefire removed the war premium, lifting stocks and giving crypto room to bounce. BTC pushed back toward $71K–$72K, with ETH and alts following, but this still looks like a relief rally, not a full bull reset. Macro pressure remains, with a strong dollar, tight liquidity, and rising pain onchain still capping risk appetite.

2. 🐂 Alpha Insights – Ethereum’s real upside may come from fixing fragmentation through the Ethereum Economic Zone thesis, turning ETH back into the strongest network-effect trade in crypto.

The current state of the market.

→ One the weekly TAO and ZEC seem interesting. TAO is the #1 coin for Crypto AI exposure, while ZEC remains the privacy leader with outstanding performance.

The big story this week was pure macro theater.

Trump had drawn a line in the sand: reopen the Strait of Hormuz by Tuesday evening, or face massive U.S. strikes on Iranian infrastructure. That is about as subtle as a flamethrower. Then, right before the deadline, both sides agreed to a temporary two-week truce.

Iran committed to safe commercial passage through Hormuz. The U.S. paused strikes. Talks are expected to begin soon.

→ The immediate “oil shock plus regional escalation” trade got repriced in a hurry.

That relief showed up everywhere at once.

BTC surged back toward $71K-$72K after spending earlier stretches of the week sliding toward the mid-$66K area on escalation fears. ETH and the rest of the alt complex followed. Stocks ripped higher. Oil dumped back below $100 as traders stopped pricing in a prolonged disruption through one of the world’s most important shipping routes.

→ Crypto did exactly what risk assets do when geopolitical panic comes off the table: it went quite a bit higher.

The move makes sense. Crypto is still a high-beta expression of market mood, whether people want to admit it or not. When war risk fades, oil cools, and global markets stop bracing for the worst, money rotates out of defense and back into volatility.

That said, a ceasefire is not a solved problem. It is a countdown clock.

This deal only lasts two weeks for now, and the region is still messy. Israel remains a swing factor. Any violation, failed negotiation, or new military headline can put the risk premium right back on the board.

→ So yes, the durability of this pump is still on trial.

Zooming out, the broader BTC structure still looks less like “fresh cycle highs incoming” and more like a classic painful range market.

The bear market is worth taking seriously. A few months of BTC chopping between $60K and $80K, with scary wicks below support and just enough fakeouts to break people mentally, would feel awful in real time. It would also be completely normal.

That is usually how these phases work. Not with one cinematic collapse, but with repeated emotional damage.

Onchain data leans in that direction too.

Right now, around 11.2M BTC are in profit, while roughly 8.2M BTC are in loss. That second number is creeping toward levels that start to resemble late bear-market conditions, but not full capitulation. At the 2022 bottom, only around 9M BTC were in profit while roughly 10.6M sat at a loss.

→ We’re getting closer to the real pain levels but we might not be there yet.

There are two ways to read that.

The bullish read is that more pain has already been absorbed. Weak hands are getting flushed. Valuations are becoming more interesting. The reset process is underway.

The bearish read is even simpler: this still looks like early-to-mid bear behavior, not the final washout. In 2022, more than half the supply was underwater and broader metrics like NUPL and MVRV got pushed to real extremes. We are not there yet.

→ This is the awkward part of the cycle: enough damage to kill confidence, not enough to declare the bottom with a straight face.

Then there’s macro, which continues to act like a wet blanket.

A stronger U.S. dollar is still a headwind for risk assets. Higher yields and tighter liquidity conditions make it harder for crypto to sustain upside without a very clear catalyst. So even though the ceasefire bounce helped, it did not magically erase the bigger backdrop.

That is why patience matters more than prediction here.

You do not need to call the exact bottom in a market like this. You need to survive the chop, avoid getting baited by every green candle, and recognize that not every rally is the start of a new regime.

→ My read: relief rally first, structural shift later. Maybe.

→ My strategy: DCA into solid positions (BTC, ETH), nobody will buy the bottom.

Good opportunities I discovered.

The real Ethereum thesis is not about speed anymore.

It is about fixing the self-inflicted wound.

Ethereum still has the deepest liquidity, the richest DeFi ecosystem, and the strongest developer tooling in the industry. By all the metrics that should matter long term, it should still be running the table. And yet this cycle, ETH felt weirdly underwhelming.

That is because Ethereum did not lose its moat. It fragmented it.

The L2 roadmap solved for scaling, but it also split the ecosystem into a bunch of semi-isolated zones. Liquidity got thinner across venues. Developers had to rebuild pieces of the same stack over and over. Users got stuck bridging, switching networks, and pretending this was all normal behavior.

→ Ethereum’s biggest problem was not competition. It was fragmentation.

That is why the Ethereum Economic Zone is such an interesting idea.

The vision is to stitch Ethereum and aligned L2s back into one usable economic surface. Unified liquidity. Synchronous composability. A better developer experience. A user experience where people stop asking which chain they are on because, functionally, it does not matter anymore.

If that sounds obvious, good. That is the point.

Ethereum became dominant because its network effects were overwhelming. The more apps, liquidity, devs, and users it had, the stronger the flywheel got. Then the ecosystem scaled in a way that weakened that flywheel in practice.

EEZ is compelling because it tries to restore the thing that made Ethereum special in the first place.

→ This is not a new narrative. It is a repair job.

Of course, there is a caveat. This is still a vision more than a finished reality. Major rollups have not fully aligned around it. The technical details still need to prove themselves. Crypto has a habit of celebrating elegant diagrams before the hard engineering is done.

But the direction is right.

And that matters because if Ethereum can make the ecosystem feel unified again, the whole ETH story changes. It stops being the chain with premium assets and a fragmented UX, and starts becoming the capital base layer with actual usability.

That is when ETH gets interesting again.

Not because it suddenly becomes the fastest chain in crypto.

Because it becomes the most valuable network effect machine again.

If you want a straight to the point newsletter full of calls, new projects, airdrop farms, memecoin and DeFi moonshots, then Hix0n’s Confidential is the place for you. I can really recommend his take (if you’re comfortable with high risk).

That’s it for today’s episode, thank you for being here!

Till next time, stay safe!

• Adrian