Bitcoin fell sharply on Sunday after President Donald Trump dismissed Iran’s latest response to a U.S. peace proposal, reigniting fears of prolonged conflict in the Middle East and sending traders rushing out of risk assets during thin weekend liquidity.
Trump posted on Truth Social that he had “just read the response from Iran’s so-called ‘Representatives.’ I don’t like it — TOTALLY UNACCEPTABLE!” The post came hours after Iran transmitted its counterproposal through Pakistani intermediaries, according to Iran’s state news agency IRNA.
What Iran Demanded
Iran’s response called for an end to hostilities on all fronts, the lifting of U.S. sanctions on Iranian oil sales for 30 days, an end to the naval blockade on Iranian ports, and the release of frozen assets. Iranian state television reported that Tehran viewed the U.S. proposal as tantamount to capitulation, insisting on war reparations and complete Iranian control over the Strait of Hormuz. The U.S. proposal had sought to reopen the strait and roll back Iran’s nuclear advancements.
The breakdown marked the latest setback in negotiations that began in late February and have yet to produce a lasting agreement. Israeli Prime Minister Benjamin Netanyahu added to the hawkish tone on Sunday, telling CBS that the conflict with Iran is “not over because there remains nuclear material, specifically enriched uranium, that must be extracted from Iran”.
Market Fallout
Bitcoin dropped from the $81,500 range, with the selloff triggering liquidations in leveraged long positions as weekend trading volumes left order books vulnerable to sharp moves. The cryptocurrency had been trading above $81,000 since breaking through that level on May 5, buoyed by $2.44 billion in April spot ETF inflows and earlier de-escalation hopes tied to Trump’s Project Freedom naval escort operation.
The pattern has become familiar in 2026. Bitcoin fell below $80,000 on May 7 after an Iranian official first called the U.S. framework “unrealistic,” wiping out $91 million in long positions and triggering $270 million in total crypto liquidations that day. In April, Trump’s threats to hit Iran “extremely hard” sent Bitcoin below $67,000, and a broader rejection of peace talks pushed it under $74,000.
A Volatile Backdrop
Oil prices rose on Sunday’s news, extending a pattern where escalation in the Persian Gulf has driven energy costs higher throughout the conflict. U.S. stock futures also weakened. Trump has repeatedly threatened to resume extensive airstrikes if Iran does not agree to reopen the strait, and earlier in the day accused Tehran of “playing games with the United States and the rest of the World”.
