With Greece's new government and euro zone finance ministers poles apart as bailout talks stalled late Monday, it's come down to who blinks first, analysts said.
"Europe's going to back down. They're going to give more concessions to Greece," Destination Wealth CEO Michael Yoshikami told CNBC. "In the end, there's going to be a new agreement, not just an extension, but a renegotiation."
While its economy is just a small percentage of the eurozone's gross domestic product (GDP), "Greece is too big to fail," Yoshikami said, adding that's why the market reaction has been muted.
After talks reached a stalemate, the euro faced heavy selling, dropping from over $1.14 on Monday to a low of around $1.1320 in early trade Tuesday, before bobbing back above to $1.1339.
Is Greece cornered?
If there's no deal, Greece may "stand on its own feet" for a few weeks after the current program expires, Societe Generale said in a note Tuesday. "After that, the Greek government will need external financing or will default," it said.