The crypto market is up today, March 4, erasing some of Tuesday’s losses. Bitcoin led the rally, rising 6.45% and moving above the key $71,000 resistance level.
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 included 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 on Sunday to discuss this. Israel urged the US to abandon the offer and focus on fighting.
Iranian officials have denied reaching 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
Many traders think that the war may continue for a few more weeks. Data from Polymarket indicates that the probability of a ceasefire occurring this month has decreased to 38%. The likelihood of a ceasefire in April has dropped to 57%, and for May, it has fallen to 64%.
A ceasefire deal between the parties would be bullish for Bitcoin, Solana, Chainlink, and other tokens, as it would lead to lower inflation and end hostilities among 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, this could be a dead-cat bounce or a bull trap. A dead-cat bounce occurs during bear markets when an asset briefly rebounds and then resumes its downtrend.
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