The crypto market is rallying today, with Bitcoin price rising to $63,450, up from this weekend’s low of $59,090. The market capitalization of all tokens rose by 1.1% in the last 24 hours to $2.17 trillion, with the top gainers being Stargate Finance (STG), Humanity, Audiera, Venice Token, and Curve DAO, which jumped by over 10%.
Crypto market rally triggered by Trump Iran assurance
Bitcoin and most altcoins are rising today, mirroring the performance in the stock market. The Dow Jones Index jumped by over $1,000 on Thursday, while the Nasdaq 100 and S&P 500 rose by over 1.75%.
Similarly, the US Dollar Index (DXY) dropped to $99.7, while the VIX Index retreated by double digits. In a statement on Thursday, President Donald Trump said that the US had reached a deal with Iran and that he expects the signing to happen in Europe soon.
The announcement led to a sharp retreat in crude oil prices, with Brent and the West Texas Intermediate (WTI) falling to $88 and $86, respectively.
Falling crude oil prices means that US inflation will come down in the coming months. Two reports released this week showed that the headline consumer price index (CPI) rising 4.2% in May. Another report released on Thursday showed that the Producer Price Index (PPO) rose to 6.5% in May, moving further away from the Federal Reserve’s target of 2.0%.
A retreat of inflation will lower the risks that the Federal Reserve will hike interest rates. Just yesterday, the European Central Bank (ECB) decided to hike interest rates for the first time in years.
Still, the main risk is that Trump’s announcement was wrong. Indeed, Iranians have warned that that there was no deal in place, and to a large extent, many market participants tend to believe the Iranians.
Bitcoin and altcoins are also rising as investors buy the dip after the recent crash. BTC plunged to $59,100 during the weekend, pushing investors to buy the dip. The same happened with other altcoins like Ethereum and XRP.
Potential risks to the crypto rally
There are several risks involved in the crypto market rally today. The first main risk is that the war will restart since Iran has rejected Trump’s claims. Israel’s Netanyahu has also insisted that his war against Hezbollah will continue in the near term. Such a move would make it hard for Iranians to reach any deal with the US.
The other main risk is that the upcoming SpaceX IPOwill drain liquidity in the market. Indeed, data shows that crypto ETFs have continued shedding assets in the past few days. Bitcoin ETFs have lost over $4 billion in the past four weeks.
Also, spot Ethereum ETFs have lost over $180 million this month. Some of these funds have moved to the stock market and in the upcoming SpaceX stock. In a report on Thursday, Bloomberg reported that retail investors had placed orders worth over $50 billion.
Bitcoin price has formed a risky pattern
BTC price chart | Source: TradingView
The daily chart shows that the BTC price has formed the risky bearish pennant pattern. This pattern is made up of a vertical line and a symmetrical triangle. In most cases, it often leads to more downside over time.
The coin has also remained below all moving averages, a sign that bears are in control. Therefore, the coin will likely continue falling in the near term, potentially to the year-to-date low of $59,100. Such a move would lead to more downside in the crypto market.
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