Bitcoin surged to its highest value since early February, breaking through the upper limit of its trading range amid renewed optimism surrounding potential resolutions to the ongoing Middle East conflict. The cryptocurrency reached a peak of $78,343, soaring as much as 4.1% before adjusting slightly.
This upward trend extended to other digital assets, with Ethereum experiencing a 3.3% increase and XRP rising by 2.4%. This broader “risk-on” rally was fueled by Iran’s declaration that the Strait of Hormuz is now fully accessible for commercial traffic, encouraging traders to adopt a more risk-tolerant approach. Concurrently, oil prices and the dollar saw significant declines.
Matt Mena, senior crypto research strategist at 21shares, commented on the developments, stating, “The reopening of the Strait of Hormuz is the risk-on signal the global markets have been waiting for. By removing one of the most significant geopolitical choke points in the world, Iran has effectively uncorked a massive wave of liquidity and investor confidence.”
Despite this surge in optimism, data from the derivatives market painted a more cautious picture. Traders appeared defensive, as funding rates for perpetual futures contracts remained negative, indicating hesitation among leveraged traders regarding future price increases. Additionally, substantial premiums were being paid for put options, offering protection against potential declines to levels of $60,000 and $50,000.
Jasper De Maere, an OTC trader at crypto market maker Wintermute, expressed the need for sustained clarity regarding the Strait of Hormuz and increased institutional buying to achieve a decisive breakout from the current trading range. He noted, “A sustained ceasefire screams bullish, but each week the Strait remains disrupted from today probably brings an exponentially worse outcome as shocks will start to ripple through supply chains and the global economy.”
Meanwhile, emerging catalysts for the market have been identified. Strategy Inc., for example, has invested approximately $2.6 billion in Bitcoin over the past two weeks, providing critical support for the market, according to Bohan Jiang, a senior derivatives trader at FalconX.
The positive sentiment surrounding cryptocurrency stocks was reflected in the share prices particularly of Strategy Inc., which saw a notable rise of up to 16%—its largest single-day gain since early February. Other crypto-related companies also benefited from the favorable conditions, with Coinbase Global Inc. rising by up to 8% and Galaxy Digital Inc. seeing an increase of over 10%.
