Bitcoin drops 3% to $26,200 as Trump rejects Iran cease-fire

Bitcoin fell about 3 % on Tuesday, slipping to roughly $26,200, as former President Donald Trump dismissed Iran’s cease‑fire proposal for the Gaza conflict, a move that pushed crude oil above $100 a barrel and lifted U.S. Treasury yields ahead of Wednesday’s personal‑consumption‑expenditures (PCE) report. The price drop came after the market had already been chipping away at last week’s gains.

Trump’s public rejection of Iran’s offer added fresh geopolitical tension to an already volatile week. Iran had signaled it would back a cease‑fire if Israel halted its offensive, a stance that some analysts hoped might ease Middle‑East risks and calm oil markets. Instead, Trump’s comment was taken as a sign that diplomatic progress was unlikely, reviving fears of a prolonged conflict that could disrupt supply lines. The oil rally reflected those concerns, with Brent crude climbing to $101.30 and U.S. West Texas Intermediate to $98.70 per barrel.

The crypto market reacted sharply to the heightened risk sentiment. Bitcoin’s decline was mirrored by a broader sell‑off in digital assets, with Ether slipping 2.5 % to around $1,800. At the same time, the 10‑year Treasury yield rose to 4.55 %, its highest level in more than two years, while the two‑year note jumped to 5.10 %. Traders said the higher yields signal rising inflation expectations, especially as the PCE data – the Fed’s preferred gauge – looms. Analysts warned that continued oil price pressure could keep inflation sticky, prompting investors to shy away from riskier assets like crypto.

All eyes now turn to the PCE report due Wednesday, which will shape expectations for the Federal Reserve’s next policy move. If the data show inflation still above the Fed’s 2 % target, the central bank may keep rates high, further supporting yields and keeping risk‑off sentiment alive. Crypto investors will watch for any signs of market stabilization; a softer PCE reading could restore confidence and halt the Bitcoin slide. In the meantime, the market remains on edge, balancing geopolitical uncertainty with the looming inflation numbers.