Bitcoin briefly hit a three-week high at the open of U.S. trading on Wednesday amid a stock rally after the announcement of a ceasefire between the U.S. and Iran.
Key Points:
- Bitcoin set a three-week high but quickly pulled back and lost all its gains.
- The market failed to hold the momentum from the ceasefire. Traders are waiting for the price to return to higher levels.
- Increased volatility ahead. U.S. inflation data may impact the market.
Bitcoin Fails to Hold Above $72,000
According to TradingView, the BTC/USD pair climbed to $72,865 on Bitstamp, but then pulled back and lost its gains.
BTC/USD chart, 1-hour timeframe. Source: TradingView
News of a two-week ceasefire between the U.S., Israel, and Iran immediately pushed risk assets higher. At the open, the S&P 500 gained more than 2.5%.
WTI crude oil, on the other hand, fell to $91 per barrel. Pressure eased as concerns over supply disruptions faded and movement through the Strait of Hormuz resumed. This happened despite reports of an attack on a pipeline in Saudi Arabia.
WTI crude oil chart, 1-hour timeframe. Source: TradingView
According to The Kobeissi Letter, the S&P 500 index is set to open above 6,800 and is just 2.9% from a new all-time high. The market added about $1.6 trillion in a day.
S&P 500 chart, 1-hour timeframe. Source: TradingView
This was also felt in the bitcoin market.
Crypto trader Michaël van de Poppe noted that the ceasefire set the direction for the markets and BTC broke through the $71,000 level, starting to form a bullish structure. He also pointed out the drop in oil and the reopening of the strait, which creates conditions for the price to return to average levels.
BTC/USDT chart, 1-day timeframe. Source: Michaël van de Poppe
According to him, holding the $69,500 level is now critically important.
“This will confirm a structure of higher lows and highs and maintain upward momentum. In that case, the market could move to new highs along with the Nasdaq.”
New Volatility Ahead Due to Inflation
Trader Daan Crypto Trades noted that the $72,000 level, which the market has been unable to break for several weeks, remains key.
“Testing the $72K level again. Let's see if the bulls can push through this time,” he wrote on X.
According to him, continued growth requires a confident breakout and holding above this level for at least a few days.
BTC/USDT chart, perpetual contract, 8-hour timeframe. Source: Daan Crypto Trades
Earlier, other traders also pointed to the weakness of the current move. In their opinion, bitcoin bulls still have a lot of work to do.
By the end of the week, the market is awaiting the release of key U.S. inflation data. These will show the first consequences of the conflict with Iran and will likely add volatility to risk assets.
