BTC and stocks rally on hopes of ending US-Iran conflict

• Bitcoin (BTC) surged to an intraday high of $68,589 following reports that the U.S. and Iran are considering diplomatic paths to end ongoing hostilities.
• Major U.S. stock indices rallied significantly, with the Dow Jones Industrial Average gaining over 1,125 points, while the S&P 500 and Nasdaq rose by 2.91% and 3.83%, respectively.
• Despite the upward price action, analysts note that spot demand remains weak and stablecoin inflows are at a two-year low, suggesting a cautious outlook among professional traders.

Geopolitical Shifts Drive Market Optimism

Investor sentiment shifted positively following statements from U.S. President Donald Trump regarding a potential resolution to the conflict involving the U.S., Israel, and Iran. According to reports from The Wall Street Journal, Trump has indicated to aides that he is open to ending the war, even if the Strait of Hormuz remains partially restricted. Simultaneously, unconfirmed reports regarding Iranian President Masoud Pezeshkian suggest that Iran may also be seeking a strategic exit from the conflict, provided certain security assurances are met by the U.S. and Israel.

Technical Levels and Bitcoin’s Momentum

While Bitcoin held gains above the $68,000 mark, market analysts remain divided on the sustainability of this rally. For a definitive trend reversal to be established, experts suggest that Bitcoin must secure a daily close above its 50-day moving average and the $68,879 resistance level. Clearing these hurdles could potentially trigger a liquidation-driven rally targeting the $82,000 range by removing overhead short liquidity.

Underlying Market Weakness and Low Demand

Beneath the headline-driven volatility, several metrics point to a lack of sustained buying pressure. Both open interest in the futures market and spot demand have remained largely stagnant since the market sell-off on February 6, which saw prices dip below $60,000.

Key data points reflecting current trader caution include:

• Short-term holders currently have an average cost basis of $85,800, leaving many positions in the red.
• Inflows of stablecoins to exchanges have reached their lowest levels in nearly two years.
• Macroeconomic concerns regarding the long-term impact of regional conflict on energy and service costs continue to weigh on market participants.

This lack of directional conviction suggests that the recent price movement is primarily fueled by equities performance and perpetual futures rather than long-term accumulation.