Why is the crypto market rallying today? (April 14)

The crypto market rose 4.3% on Tuesday, moving above the $2.6 trillion mark after reports emerged that Iran could be considering ending the war, as the U.S. naval blockade on Iranian traffic through the Strait of Hormuz continues to apply pressure.

Bitcoin (BTC) price rallied nearly 6% to a 4-week high of $74,788 today before paring off some of its gains and settling at $74,279 at the time of writing. Ethereum (ETH) was up 8%, perched at $2,363, while other major crypto assets such as BNB (BNB), XRP (XRP), Solana (SOL), and Dogecoin (DOGE) saw gains ranging between 2–5%.

Some of the top gainers of the day were RaveDAO (RAVE) with 86%, Algorand (ALGO) with 9%, and Canton (CC) with 8%. As crypto prices surged, it triggered over $430 million in short liquidations across crypto leveraged markets, forcing bearish traders to buy back crypto assets from the market, which further added upside momentum to the crypto market rally.

The Crypto Fear and Greed Index showed a reading of 54 in the neutral threshold, a sign that market sentiment has relatively eased as signs of potential de-escalation in the Middle East conflict appear.

Crypto prices moved higher today after reports emerged that Iran may be considering abandoning its uranium enrichment plans to negotiate for an end to the U.S.-Iran war. Notably, US President Donald Trump revealed that Iranian officials have called his administration and “want to work a deal.”

This comes just a day after the U.S. enforced a naval blockade on the Strait of Hormuz in an attempt to intercept military vessels moving to and from Iranian ports. However, the blockade excludes non-Iranian vessels, which helped calm immediate fears of a total global supply chain collapse.

The Iranian government, for its part, had earlier accused the US of committing piracy as thousands of Iranians rallied in Tehran against the blockade. They further warned that they would retaliate if any threats were directed against civilian ships and vessels.

Iran’s fresh attempt at diplomacy has reignited hope of a more concrete ceasefire being put in place, which could potentially lead to an end of the war and reopen the strait to normal traffic. Pakistan is reportedly offering to host the next round of talks between te in Islamabad.

Shortly following the news, crude oil prices fell from above $119 yesterday to approximately $88 as G7 and IEA reserve releases hit the market, reducing global inflation fears and favoring risk assets like crypto.

U.S. macro data points to cooling inflation

Crypto prices also benefited from the release of several cooling macro data points yesterday. Notably, the PCE Price Index, the Federal Reserve’s preferred inflation gauge, came in lower than expected against previous forecasts. This cooling trend historically invites investors back into risk assets like crypto.

Furthermore, JOLTS Job Openings came in below expectations, suggesting a softening labor market. Additionally, GDP growth remains steady but controlled. 

Taken together, these indicators suggest that inflation is finally being tamed, increasing the likelihood that the Federal Reserve will consider rate cuts this year.