Bitcoin (BTC) experienced a notable decline, falling back toward the $65,000 mark as geopolitical tensions resurfaced between Israel and Lebanon, overshadowing earlier optimism about a potential U.S.-Iran peace deal. The leading cryptocurrency dropped from an intraday peak of $66,900 to a low of $65,400 before partially recovering to trade around $65,700, according to market data from crypto.news.
The sell-off was triggered by reports that Iran’s military accused Israel of repeatedly violating the ceasefire in southern Lebanon following the announcement of the U.S.-Iran memorandum of understanding. Tehran warned of a “harsh response” if the alleged attacks persisted, dampening the positive sentiment that had driven Bitcoin higher earlier in the session.
Earlier gains had been fueled by reports that Washington and Tehran were set to sign a deal allowing tanker traffic through the Strait of Hormuz, which also pushed crude oil prices down more than 6% to around $75.5 per barrel—their lowest since early March. However, the renewed hostilities reversed the momentum.
In addition to geopolitical risks, traders remained cautious ahead of the Federal Reserve’s two-day policy meeting. While rates are expected to remain unchanged, uncertainty about the Fed’s outlook, especially after inflation accelerated to 4.2% year-over-year in the latest CPI report, has limited risk appetite.
From a technical perspective, Bitcoin is attempting to reclaim a key horizontal level near $65,150, which had acted as support in February and March before breaking during the early June sell-off. Bulls briefly pushed above that zone but faced resistance near $67,000, leading to a pullback.
On the four-hour chart, Bitcoin remains above a rising trendline from the June 6 low near $59,200 and has broken above a descending trendline that had capped prices in late May and early June. Fibonacci retracement levels place immediate resistance at $66,400 (61.8% retracement of the decline from $78,100 to $59,200). A break above that could expose $68,650 and $70,900.
Momentum indicators remain constructive: the four-hour RSI held above 55, and the Aroon Up indicator was dominant. The daily MACD histogram turned positive for the first time since the June breakdown, although Chaikin Money Flow remains slightly below zero, indicating that capital inflows have not fully recovered.
Crypto analyst Ardi noted that Bitcoin’s ability to defend the $64,000 region is critical ahead of the Fed meeting, stating that holding that level could allow bulls to maintain the local structure and extend the rally even after a typical post-FOMC correction. Another analyst, Daan Crypto Trades, pointed out that Bitcoin is trading between its weekly 200-day moving average and 200-day exponential moving average, with bulls aiming to close the weekly candle above the 200EMA while holding the 200MA as support.
Liquidation data from CoinGlass shows a large liquidity pool near $65,000, where leveraged long positions have accumulated. A break below that area could expose another concentration near $64,500 and accelerate downside volatility. Conversely, substantial short liquidation clusters between $67,000 and $68,500 could act as upside magnets if Bitcoin regains momentum after the Fed decision.
Geopolitical developments remain a wildcard. Israeli Prime Minister Benjamin Netanyahu stated that Israeli forces will continue occupying southern Lebanon despite the U.S.-Iran agreement, while Iran has threatened retaliation if ceasefire violations persist. Any escalation could quickly reverse the market’s optimism.
Failure to hold the $64,000–$65,000 support zone would weaken the current recovery and shift attention back to the June low near $59,200. On the upside, a break above $66,400 could open the door to $68,600 and potentially $71,000 as traders unwind short positions after the FOMC meeting.