Crypto Week Preview: U.S.-Iran Ceasefire and Tesla Earnings

The crypto market enters the new week with a fragile rally after Friday's gains. The temporary reopening of the Strait of Hormuz led to a decline in oil prices and an increase in risk assets, including bitcoin and the broader crypto market. However, the situation reversed on Saturday as Iran targeted ships attempting to pass through the strait, and the U.S. seized an Iranian tanker on Sunday. As the ceasefire is set to expire mid-week, investors will be watching to see if the current risk-on trend can withstand a potential energy crisis. A key level to watch is bitcoin's ability to hold its ETF cost basis near $74,000. According to Luke Nolan, senior ETH research associate at CoinShares, a decisive hold above this level would confirm the risk-on rotation. Nolan stated, "The reopening of the Strait of Hormuz led to a decrease in oil prices and an increase in equities, which pulled crypto higher. The next step hinges on bitcoin holding above its ETF cost basis (~$74k), which would confirm the risk-on rotation already visible in flows." A hold above $74,000, combined with a fourth consecutive session of positive ETF inflows, would validate the rotation thesis. On the other hand, a break below this level would likely lead to increased volatility in the sector.