The crypto market rose by 4.3% on Tuesday, moving above $ 2.6 billion dollars after reports emerged that Iran may consider ending the war, as the ban on US ships in Iranian traffic through the Strait of Hormuz continues to apply pressure.
Summary
- Crypto market cap down 4.3% over $2.6T as easing US-Iran tensions increase appetite.
- Bitcoin hit a 4-week high near $74.8K while the $430M short finish accelerated the rally.
- Cooling US inflation data bolstered hopes for a rate cut, further supporting crypto prices.
Bitcoin (BTC) price rose nearly 6% to a 4-week high of $74,788 today before paring some of its gains and settling at $74,279 at the time of writing. Ethereum (ETH) rose 8%, reaching $2,363, while other major crypto assets such as BNB (BNB), XRP (XRP), Solana (SOL), and Dogecoin (DOGE) saw gains ranging between 2-5%.
Other big gainers on the day were RaveDAO (RAVE) by 86%, Algorand (ALGO) by 9%, and Canton (CC) by 8%. As crypto prices rose, they sparked more than $430 million in short payments in leveraged crypto markets, forcing bearish traders to repurchase crypto assets from the market, further adding momentum to the crypto market rally.
The Crypto Fear and Greed Index showed a reading of 54 on the threshold of neutrality, a sign that the market mood has decreased as signs of a possible decline in the Middle East conflict are emerging.
Crypto prices rose today after reports surfaced that Iran may consider abandoning its uranium enrichment plans to negotiate an end to the US-Iran war. Notably, US President Donald Trump revealed that Iranian officials have called his administration and “want to make a deal.”
This comes just a day after the US imposed a naval blockade on the Strait of Hormuz in an attempt to prevent military vessels from sailing to and from Iranian ports. However, the ban does not include non-Iranian vessels, which has helped ease immediate fears of a complete collapse of the global supply chain.
The Iranian government, meanwhile, had earlier accused the US of committing crimes as thousands of Iranians gathered in Tehran against the blockade. They also warned that they will retaliate if there are threats against ships and human vessels.
A new attempt by Iran to negotiate with him has brought back hope of a ceasefire, which could lead to an end to the war and re-opening the normal road. Pakistan will reportedly hold the next round of inter-te talks in Islamabad.
Shortly after the news, crude oil prices dropped from over $119 yesterday to around $88 as the G7 and IEA budget releases hit the market, easing global inflation fears and favoring riskier assets like crypto.
Major US data points to cooling inflation
Crypto prices also benefited from the release of several cooling macro data points yesterday. Notably, the PCE Price Index, the Federal Reserve’s preferred inflation gauge, fell more than expected compared to previous forecasts. This cooling trend historically invites investors to return to risky assets like crypto.
In addition, JOLTS Job Openings came in below expectations, suggesting a softening of the labor market. Additionally, GDP growth remains stable but controlled.
Taken together, these indicators suggest that inflation is finally on the mend, increasing the likelihood that the Federal Reserve will consider lowering rates this year.
Disclosure: This article does not represent investment advice. The content and materials presented on this page are for educational purposes only.
