Fear is over... Stock market and crypto rally simultaneously as US-Iran tensions ease

▲ Bitcoin, stock market/ChatGPT generated image ©

The cryptocurrency market has returned to a strong rebound in just one day as risk asset preference revived.

According to CoinMarketCap, a cryptocurrency market data aggregator, on April 22 (local time), the total cryptocurrency market capitalization rose by 2.83% from the previous day to $2.63 trillion. The Fear & Greed Index recorded 62, entering the 'Greed' zone, and the average RSI was 55.84, leaving room for further upside without overheating.

Bitcoin (BTC), the market leader, rose to $78,716, up 3.80% in 24 hours and 6.45% in a week. Ethereum (ETH) rose by 4.52% to $2,414, and XRP (Ripple) increased by 1.84% from $1.45, showing a trend of attempting to settle above major resistance levels. Solana and Dogecoin also rose by around 6% each, reflecting the overall risk-on sentiment in the market.

The key background for this surge is the improved global investment sentiment due to the easing of US-Iran tensions. As the three major New York stock indices started trading higher simultaneously, news of a ceasefire extension reduced overall market uncertainty, causing funds to flow back into risk assets. In particular, the simultaneous effect of rising international oil prices and easing geopolitical risks led cryptocurrencies to show a synchronized rebound with the stock market.

However, it is still uncertain whether the upward momentum will lead to a complete trend reversal. Tensions in the Strait of Hormuz are still ongoing, and there is a possibility that the ceasefire may only be a short-term extension, leaving upward resistance pressure. In fact, the altcoin season index remains at 36, indicating a limited, Bitcoin-centric upward structure.

The market's future direction is expected to hinge on whether Bitcoin breaks above $80,000. If it stably crosses this level, there is a high possibility that the rally will expand with institutional fund inflows. Conversely, if geopolitical risks reignite, there is also an analysis that short-term profit-taking sales could quickly emerge. The market is currently in a phase of exploring its direction between 'the beginning of an uptrend' and 'continued uncertainty.'

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*