European markets opened higher on Tuesday as investors tracked developments surrounding Iran's peace proposal, with the UK's FTSE 100 index expected to open slightly higher, Germany's DAX projected to rise by 0.23%, while France's CAC 40 is seen gaining 0.34%. According to IG market data, Italy's FTSE MIB is also expected to trade 0.3% higher, reflecting cautious optimism as investors balance improving sentiment with ongoing geopolitical uncertainty. White House press secretary Karoline Leavitt confirmed on Monday that the proposal involves reopening the key shipping route if the United States lifts its blockade and the war ends, with the proposal delaying negotiations on Tehran's nuclear ambitions to a later stage. However, uncertainty remains over whether Trump is willing to consider the proposal, as he has previously stated that the blockade would not be lifted until a deal with Iran is '100% complete'.
Bitcoin fell by 2.25%, settling at $76,888, as the collapse of US-Iran negotiations intensified Middle East tensions and disrupted energy flows through the Strait of Hormuz. Over the weekend, the US administration under President Donald Trump cancelled a scheduled diplomatic mission to Islamabad, Pakistan, which was intended to facilitate a new round of negotiations with Iran. The US-Israel-Iran conflict, now entering its second month of active hostilities, is generating renewed concerns regarding the potential for a prolonged energy crisis. Iran has maintained stringent restrictions on maritime shipments through the Strait of Hormuz, a vital global artery accounting for approximately 20% of the world's oil and natural gas transit. Iranian officials have stated they will not return to the negotiating table until Washington lifts the blockade on Iranian ports, which they characterize as a fundamental violation of the previous ceasefire agreement.
The collapse of US-Iran negotiations has driven Brent crude prices above the $100 mark, with Brent crude futures (BRNN6) rising 2.58% to $101.69 and West Texas Intermediate (WTI) contract (CLM6) appreciating 2.09% to $96.37 per barrel. This disruption has exerted significant upward pressure on energy markets, heightening global economic anxiety and risk aversion. Oil prices edged higher overnight, reflecting concerns about supply disruptions and the broader implications of the conflict. Historically, such uncertainty prompts investors to exit 'risk-on' markets in favour of safe-haven or defensive assets, with Bitcoin valuations being adversely affected by the heightened geopolitical and economic volatility. The escalation of regional conflict has dampened appetite for speculative digital assets, as investors abandon risky assets amid concerns over prolonged energy disruptions.
From a technical perspective, Bitcoin has recently experienced a breach of its long-term bullish structure and is currently struggling to overcome a significant resistance zone. Key resistance levels include the immediate technical ceiling near $79,000, with the next significant resistance at $84,000 (which coincides with the 200-day SMA). Support levels are positioned at $70,000, with the next critical floor at $62,000. Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are currently trending upwards, reflecting the strength of the immediate bullish impulse, though both indicators are approaching overbought territory. Technical indicators remain positioned near overbought zones, suggesting a cautious near-term outlook as Bitcoin faces significant uncertainty within a consolidative phase. While equities are set for a higher open, uncertainty surrounding the Iran conflict and central bank actions is likely to keep volatility elevated in the near term.
Beyond geopolitics, investor attention is firmly on central banks this week, with the US Federal Reserve, European Central Bank, and Bank of England all scheduled to announce policy decisions. The Federal Reserve's decision on Wednesday is being closely watched, as it could mark the final meeting chaired by Jerome Powell before Kevin Warsh is expected to take over in May. Recent developments have shaped expectations, with the Department of Justice dropping its criminal probe into Powell on Friday, prompting Senator Thom Tillis to lift his block on Warsh's confirmation. The European Central Bank and the Bank of England are due to publish their latest monetary policy decisions on Thursday, with economists expecting both institutions to keep benchmark interest rates unchanged this month but likely signaling that future rate hikes remain possible later in the year. Major European companies including Novartis, Airbus, BP and Barclays are due to report earnings on Tuesday, which could shape near-term market direction alongside the evolving geopolitical situation.
