Cryptocurrencies and risk assets rebound as the dollar retreats following comments from Donald Trump suggesting that the conflict in Iran could end soon, though bitcoin still faces a broader bearish trend. What you need to know:
BTC gained approximately 3.9% since midnight UTC, while ETH regained the $2,000 level amid a widespread advance in the crypto market.
The dollar index (DXY) fell to 98.5 after Trump stated that the war with Iran could end "very soon," which helped boost cryptocurrencies, stocks, and precious metals, while oil retreated.
Despite the rebound, bitcoin continues in a broader downtrend that dates back to early October, and would need to rise towards $98,000 with stronger support levels to reverse the pattern. Cryptocurrencies were not alone in their rise. U.S. stocks and precious metals also rose following statements from U.S. President Donald Trump, who claimed that the war in Iran would end "very soon". The dollar and oil gave back much of their gains from last week. The dollar index (DXY) briefly reached a high of 99.7 on Monday, and is now at 98.5. The cryptocurrency market is inversely correlated with the dollar, so a bitcoin rebound could be on the horizon if the DXY continues to weaken for the rest of the week.
The war in Iran — which, apparently, could now be shorter than many thought — has revealed a resilience in the cryptocurrency market that was not previously observed. Bitcoin has outperformed stocks and precious metals since the onset of the conflict, potentially rebuilding the reputation of this asset class as a safe-haven investment. But it has not yet emerged from the woods. Bitcoin and the market in general continue in a clear downtrend since early October, characterized by a series of lower highs and lower lows. To break that trend, bitcoin needs to regain ground towards $98,000 having established support levels along the way.