US-Iran Ceasefire Follows Pre-Strike Actions, Boosts Crypto
Ahead of a confirmed two-week ceasefire, the United States conducted a military strike on Iran's Kharg Island in the Persian Gulf, as President Donald Trump's stated deadline for actions against Iran loomed. Israel also conducted airstrikes targeting Iranian bridges ahead of Trump's deadline, stating the action was intended to protect Iranian infrastructure. Iran had previously warned of a "proportionate" response should Trump follow through on threats targeting its power plants.
Diplomatic efforts intensified amid these tensions. Pakistan's Prime Minister Shehbaz Sharif engaged in discussions, with Pakistan appealing to President Trump for a two-week extension to the deadline in return for Iran's agreement to open the Strait of Hormuz. Trump, who had previously delayed such deadlines four times, announced a two-week "double-sided ceasefire" with Iran. Under this agreement, the US committed to suspending further strikes on Iran, contingent on Iran's reopening of the Strait of Hormuz, a declaration publicly communicated via Truth Social and confirmed by Iran's Foreign Minister.
The de-escalation immediately impacted global financial markets, particularly crypto. The crypto market surged, jumping approximately 5%. Specifically, $BTC rose 4.27% to $71712.00. BTC sentiment registered 72.6% bullish (within its 65-75% baseline), with 75% of traders holding long positions.
Iran Guard Lifts Attack Restrictions Amid Energy Crisis Fears
Despite the ceasefire, Iran's Revolutionary Guard announced the removal of all attack restrictions. This raised concerns among analysts about global stability and potential impacts on energy infrastructure, with some reports linking it to an impending energy crisis. The broader market reacted with overall bearish sentiment, reflected in the Fear & Greed Index's 0/100 reading, indicating extreme investor fear.
Chaos Labs Oracle Glitch Triggers $25M Aave Liquidations
A misconfigured oracle from Chaos Labs, a former Aave risk oracle provider, caused approximately $25 million in false liquidations on the platform, specifically involving 10,938 $wstETH. This occurred despite Chaos Labs previously serving as a key risk manager for Aave without major bad debt events.
Chaos Labs has since exited its role as an Aave risk manager. Prior to its departure, Chaos Labs had proposed to Aave to become the exclusive oracle provider, replacing Chainlink, and requested $8 million. Aave founder Stani Kulechov rejected this proposal.
The AAVE token fell to near a two-year low below $90 following these developments. AAVE dropped to $85 on Tuesday. The token also dropped 8.4% to $87.07. While AAVE currently stands at $96.19 (up 5.0% over 24 hours), it remains down 3.1% over the past seven days. Overall sentiment surrounding AAVE was bearish, with its sentiment score dropping to 35% bullish.