Cryptocurrency markets recovered as geopolitical tensions eased, boosting risk appetite among investors. Bitcoin even surpassed $68,000, leading gains among major digital assets. However, underlying sentiment remains cautious, with limited institutional flows and persistent market fears limiting confidence in a sustained recovery.

Cryptocurrencies rebounded after Trump signaled a possible end to the conflict with Iran.

A shift in geopolitical tone boosted risk assets across all markets, including cryptocurrencies. Investors reacted to signs that tensions between the US and Iran may be easing, generating renewed risk appetite.

As a result, cryptocurrency prices rose as uncertainty surrounding energy supply stabilized. Bitcoin surged as much as 2.6%, reaching $68,335, before retreating below that level. At the time of writing, the asset was trading near $66,610, reflecting some profit-taking.

Meanwhile, Ethereum posted an intraday gain of 3.3%, while Solana and XRP rose slightly. Sentiment improved following a report in The Wall Street Journal indicating that Donald Trump is considering ending US military actions against Iran.

According to official sources, this measure could be implemented even if the Strait of Hormuz remains virtually closed. This scenario, in turn, suggests continued supply constraints but a lower risk of immediate conflict.

Bitcoin remains strong, but capital flows into ETFs signal a fragile recovery.

During March, cryptocurrency markets showed relative resilience. Bitcoin has remained stable despite declines in stocks and gold, both pressured by inflationary concerns linked to a potential energy crisis.

It’s worth noting that gold has fallen more than 13% this month, while Bitcoin has registered modest gains in the same period. Even with recent stability, Bitcoin remains significantly below its previous high.

However, overall sentiment remains cautious. The Cryptocurrency Fear and Greed Index is at 26, a level that indicates extreme fear among investors. This means that many investors are still hesitant to take risks, despite recent price increases.

Institutional demand showed a slight improvement at the start of the week. According to Coinglass data, spot Bitcoin ETFs saw a modest inflow of $69.44 million on Monday, after two consecutive days of outflows last week.

For Bitcoin’s recovery to be sustainable, institutional demand needs to be consistent and strengthen over time. Otherwise, price increases may have difficulty continuing.