- A crypto rally is going on today, with Bitcoin rising to $73,000 and the market cap of all tokens rising to $2.5 trillion.
- The rally is happening after the US and Iran reached a two-week ceasefire.
- There are risks that a crypto crash may happen if the ceasefire ends.
Bitcoin and other crypto tokens are rallying today, April 11, as the ceasefire between the US and Iran continues. BTC jumped to $73,000, while RaveDAO soared by 85%. Dash, DeXe, Arbitrum, and Siren jumped by over 10%. This article explores why the crypto rally is happening and what to expect.
Crypto Rally Continues Amid US-Iran CeasefireÂ
Bitcoin and most altcoins are rallying, bringing their total market capitalization to over $2.47 trillion. This rally happened even as the US stock market wavered, with the Dow Jones Index falling by 270 points and the Nasdaq 100 rising by 80 points.
The main reason why the crypto market rally is happening is that the US and Iran reached a two-week ceasefire this week and started negotiations in Pakistan that raise the possibility of the war ending. This explains why crude oil prices have pulled back.
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However, the main risk for this performance is that the ceasefire is highly volatile and may end soon as the US and Iran believe that they have an upper hand. Also, there is a significant distrust between the two sides, especially after the US attacked Iran during the last two negotiations.
Most importantly, Israel has continued to bomb Lebanon, which Iran disagrees with. Geopolitical experts believe that Israel is working to sabotage the ongoing negotiations as its intention is to create a failed state in Iran.
Wall Street analysts are warning of dire consequences if the ceasefire ends prematurely. In a recent note, analysts at JPMorgan warned the crude oil prices may soar to a record high if this happens as it will put energy infrastructure at risk. Iran may attack the large Saudi Arabian pipeline, which is moving over 7 million barrels a day through the Red Sea.
There is also a major risk that a regional war affecting countries like Saudi Arabia, Bahrain, Kuwait, and the UAE will happen, leading to panic selling among investors.
Such a move would lead to higher inflation and make it difficult for the Federal Reserve to slash interest rates. Data released on Friday showed that the headline Consumer Price Index (CPI) rose from 2.4% in February to 3.3% in March, and the trend may worsen.
The crypto rally is happening as demand among investors rise and liquidations fall. Data shows that the futures open interest jumped by 2.9% to over $119 billion in the last 24 hours. Similarly, the 24-hour liquidations dropped by 44% to $188 million.
Bitcoin Price Technical Analysis Points to a Crypto CrashÂ
BTC price chart | Source: TradingViewÂ
Technical analysis is sending a warning that the ongoing crypto rally may be short-lived. The most important one is Bitcoin’s weekly chart, which shows that the Bitcoin is slowly forming a giant bearish flag pattern, which normally leads to a strong bearish breakdown over time.
The coin remains below the 50-week Exponential Moving Average (EMA) and the middle line of the Bollinger Bands indicator. Also, it has dropped below the Strong, Pivot and Reverse level of the Murrey Math Lines tool.
Therefore, the coin will likely resume the downward trend, potentially to the key support level at $60,000, its lowest level this year. If this happens, it will raise the possibility of it falling to the Ultimate Support level of $50,000. Such a move will flip the crypto rally into a crash.
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