Bitcoin price jumped to its highest level in over a month as investors reacted to news that Iran had reached out to the United States for talks on ending the war.
Summary
- Bitcoin price jumped to $72,000 for the first time in a month.
- The rally happened amid reports that Iran had reached out to the United States.
- Still, recent rebounds have turned out to be dead-cat bounces.
Bitcoin (BTC) jumped to $72,000, its highest level since February 4, and 20% above the lowest level this year.
However, there is a risk that this rebound could be a bull trap. For one, Iran has rejected reports of potential talks with the United States.
The country hopes to increase damage to US interests in the region, boost crude oil and natural gas prices, and increase damage to Israel. Its leaders believe that doing that will give it an advantage during talks.
Indeed, a Polymarket poll shows that the odds of a ceasefire happening by March 31 dropped by 11% to 38%. Odds of the ceasefire happening by April 30 dropped by 15% to 56%.
The start of talks between the US and Iran would be bullish for Bitcoin and other assets as it would lead to lower inflation. It would also remove the most geopolitical risks from the market.
Meanwhile, Bitcoin price may retreat after Scott Bessent, the Treasury Secretary, hinted that the US will likely implement Trump’s 15% tariff as soon as this week. The tariff will jump from the current 10%, making it hard for companies to do business in the US.
This tariff comes after the Supreme Court ruled that Donald Trump erred when he used emergency powers to implement “reciprocal” tariffs on other countries. These tariffs are based on section 122 that enables the president to implement tariffs that last for 150 days.
Technical analysis suggests that the Bitcoin price may still retreat
Recent gains in the crypto market have turned out to be dead-cat bounces or bull traps. A DCB is a situation where a falling asset bounces back briefly and then drops again. For example, the coin rebounded on Monday and then dropped on Tuesday.
Bitcoin is still at risk of further downside as it remains below the Supertrend indicator. It also remains below all moving averages. For a recovery to happen, the coin will need to move above these indicators.
Therefore, while this could be a sign of a new bull run, there is a risk that it will resume the downward trend, and possibly retest the year-to-date low of $60,000.