The crypto market is going up today, March 4, erasing some of the losses made on Tuesday. Bitcoin led the rally, rising by 6.45% and moving above the key resistance level at $71,000.
Crypto Rally Triggered by Iran Outreach News
Solana price jumped by 7.20% and moved back to $90, while Chainlink soared by 8%. Other top gainers in the crypto market were tokens like Kite, Aerodrome Finance, and Internet Computer (ICP). The market valuation of all tokens jumped by 5% to $2.35 trillion.
The sudden crypto market rally coincided with the performance of US stocks, with the Dow Jones and Nasdaq 100 erasing earlier losses and soaring by over 0.40%. Crude oil erased some of the earlier gains.
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The main catalyst for this price action was a report that Iran had reached out to the United States on the terms for ending the war. According to the New York Times, Iranian officials reached out to the CIA to discuss this on Sunday. Israel urged the US to abandon the offer and focus on fighting.
Iranian officials have denied that they reached out to the United States. Instead, they have warned that they were prepared for a long war and would outlast the US.
Odds of a Ceasefire are Falling on Polymarket
Most traders believe that the war has a few more weeks to go. Data compiled by Polymarket shows that the odds of a ceasefire happening this month dropped to 38%. Odds of this happening in April dropped to 57%, while May fell to 64%.
A ceasefire deal between the parties would be bullish for Bitcoin, Solana, Chainlink, and other tokens because it would lead to lower inflation and end the hostilities between the three sides.
Cryptocurrencies are also rising after Donald Trump asked a US government agency to provide marine insurance for companies using the Strait of Hormuz. He also said that the US Navy will ensure safe passage in the Strait. His goal is to lower crude oil prices.
Still, as with other recent crypto rallies, there is a possibility that this is a dead-cat bounce or a bull trap. A dead-cat bounce happens during bear markets when an asset rebounds briefly and then resumes the downtrend.
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