Crypto Market Outlook: Will the Recent Rally Continue Amid US-Iran Tensions and Tesla Earnings?

The crypto market's recent surge is facing a crucial test as the US-Iran ceasefire comes to an end. The temporary reopening of the Strait of Hormuz had led to a decline in oil prices and a boost in risk assets, including bitcoin and the broader crypto market. However, the situation took a turn on Saturday with Iran targeting ships and the US seizing an Iranian tanker on Sunday. As the ceasefire is set to expire mid-week, traders are watching to see if the risk-on trend can withstand a potential energy shock. A key level to watch is bitcoin's 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 noted that with the Hormuz reopening, oil prices have dropped, and equities have rebounded to all-time highs, pulling crypto higher. He emphasized that follow-through now hinges on BTC holding above its ETF cost basis, which would validate the risk-on rotation. A fourth consecutive session of positive ETF inflows would also support the move higher. If bitcoin breaks below $74,000, volatility is likely to return to the sector. Key events to watch include token events and conferences.