Bitcoin and other cryptocurrencies rose strongly on Wednesday, amid relief in the markets after the United States and Iran reached an agreement for a ceasefire for 14 days pending negotiations aimed at reaching a permanent peace agreement.

Bitcoin climbed by 5% to reach about $71,842 early on Wednesday, recording its highest level since mid-March.

As for the rest of the cryptocurrencies, Ethereum rose by 7.7%, and Ripple also climbed by 5.5%, while Solana rose by 6.5%. As for Dogecoin, which is a memecoin, it rose by 4.4%.

During recent months, cryptocurrencies have generally traded as high-risk and high-volatility assets, and they declined with the escalation of fighting in the Middle East. Bitcoin also remains down sharply compared to its record level that exceeded $126 thousand in October of last year.

Stocks of companies linked to cryptocurrencies also recorded a rise, as the stock of MicroStrategy, the largest corporate holder of Bitcoin, climbed by 6.7%, while the stock of the cryptocurrency trading platform Coinbase Global rose by 4.9%.

And after daily gains amounting to 4.79%, Bitcoin regained the key moving averages, but it faces an important cluster of resistance levels near the session highs.

This rise pushed the price clearly above both the 20-day Exponential Moving Average at $68,749 and the 50-day Simple Moving Average at $68,683, however, resistance pressures began to appear with the approach of the price to the first technical barrier at $71,979.

This situation represents a classic scenario of price reversion to the mean, where the rapid recovery of Bitcoin faces the challenge of maintaining momentum above the moving averages that were recently regained. Also, the proximity of the price to several overlapping resistance levels indicates that the next few sessions will determine whether this bullish recovery can continue or will need a phase of consolidation.

The recovery wave faces a cluster of resistance near the session highs

The trading range during the day, between $67,805 and $72,379, reflects the return of buying interest after Bitcoin succeeded in defending support levels earlier in the session. The current price at $71,780 is slightly below the first resistance level at $71,979, which creates a narrow zone in which directional momentum faces the next decisive test.

Also, the trading volume during 24 hours amounting to $54.39 billion provides sufficient liquidity to support the rise. However, the approach of the price to the high level of the session coincides with several technical barriers that may limit the continuation of the rise in the near term.

The support structure is still holding above $64,972 despite the risks of correction

The technical support structure remains strong, as the first level at $64,972 provides an important barrier. This gap amounting to $6,808 grants protection space on the downside in case the recovery faces selling pressures near the resistance zones. As for the second support, it is located at $62,553, which is a more solid technical floor level. These levels form the wider trading range, although the focus currently is on testing resistance given the current position of Bitcoin.

Conclusion: Regaining moving averages paves the way for the next move

The trading of Bitcoin above the 20-day Exponential Moving Average and the 50-day Simple Moving Average represents an important technical development. The bullish scenario consists of the continuation of trading above these averages, which may lead to testing the level of $74,659 and the Fibonacci confluence zone. As for the bearish scenario, it consists of pressures of reversion to the mean, which may push the price to drop below $68,749, with targeting the support level at $64,972.

Oil prices fell below $100 per barrel on Wednesday after Donald Trump announced his approval of a two-week ceasefire with Iran, on the condition of an immediate and safe reopening of the Strait of Hormuz.

Brent crude futures contracts fell by $17.47, or 16%, to $91.80 per barrel by 12:05 GMT. West Texas Intermediate (WTI) crude contracts also declined by $20.33, or 18%, to $92.62 per barrel.

Benchmark European diesel prices also dropped sharply, losing $317.25, or 20.8%, to reach $1,210.50 per metric ton.

Trump's shift in position came shortly before the deadline he had set for Iran to reopen the Strait of Hormuz or face extensive attacks on its civilian infrastructure. Approximately 20% of the world's daily oil supplies pass through this narrow maritime corridor.

Trump wrote on social media: "This will be a ceasefire from both sides!", after he had earlier posted on Tuesday that "an entire civilization will die tonight" if his demands were not met.

Iran stated that it would stop its attacks if strikes against it ceased, and that safe passage through the Strait of Hormuz would be possible for two weeks in coordination with the Iranian armed forces, according to a statement by Foreign Minister Abbas Araghchi.

A senior Iranian official involved in the talks told Reuters that Iran may reopen the strait in a limited and organized manner on Thursday or Friday before a meeting between American and Iranian officials in Pakistan.

Tamas Varga, an analyst at brokerage PVM Oil Associates, said that about 10 to 13 million barrels per day of oil and product supplies stuck behind the Strait of Hormuz are expected to begin flowing gradually now.

He added: "Whether the situation that existed before March will fully return depends entirely on whether the truce can be converted into a permanent peace during the negotiations in Pakistan."

Ship operators are still seeking clarity on logistical aspects, while refineries began inquiring about new crude shipments on Wednesday in response to the ceasefire agreement.

Several Gulf countries also detected missile launches and drone attacks, or issued warnings to civilians of the necessity to take cover.

Saul Kavonic, an analyst at MST Marquee, said: "Even with reaching a peace agreement, Iran may become more emboldened in threatening the Strait of Hormuz in the future, and the market will price in a higher level of risks associated with the strait."

The American-Israeli war with Iran led to the largest monthly rise in oil prices in history, as the increase exceeded 50%.

Vivek Dhar, an analyst at Commonwealth Bank of Australia, said there is "room for a significant geopolitical premium to continue in prices in the foreseeable future depending on the details of the comprehensive agreement."

Trump indicated that the United States received a 10-point proposal from Iran, which he described as a practical basis for negotiation, adding that the parties have come very close to reaching a final agreement to achieve long-term peace.

He added on Wednesday that the United States will work closely with Iran, and will discuss with Tehran the issue of easing customs duties and sanctions.

The dollar fell to its lowest level in one month, while the euro, the yen, and the Australian and New Zealand dollars rose strongly during Asian trading on Wednesday, after Donald Trump announced his approval of a two-week ceasefire with Iran.

The Japanese yen rose by 0.7% against the dollar to reach 158.50 yen per dollar. The euro also climbed by 0.7% to $1.1677, while the British pound rose by 0.8% to $1.3403.

The Australian dollar jumped by 1.2% to $0.7063, while the New Zealand dollar rose by 1.1% to $0.5795.

Trump had previously threatened to launch extensive attacks on civilian infrastructure in Iran, which sparked international condemnations after he issued an unusual warning in which he said that "an entire civilization will die tonight" if his demands were not met.

But investors' appetite for risk returned quickly after the announcement of the ceasefire, less than two hours before the expiration of the deadline set by Trump for Tehran to reopen the Strait of Hormuz.

Ray Attrill, head of currency strategy at National Australia Bank in Sydney, said that in the event of reopening the strait "we may witness the continuation of the upward wave driven by the increased appetite for risks that we are seeing currently."

He added: "But much must happen during the next fourteen days," pointing out that currencies may be vulnerable to a correction in their recent movements during this period, and that "markets still need a measure of skepticism and caution."

The U.S. Dollar Index, which measures the strength of the dollar against a basket of six major currencies, declined for the third consecutive day to 98.943, which is its lowest level since March 11.

Gold prices rose in the European market on Wednesday to extend their gains for the second consecutive day, recording a three-week high based on the broad decline of the US dollar against a basket of global currencies, following the agreement between the United States and Iran on a two-week ceasefire, which includes the opening of the Strait of Hormuz to global navigation.

With the sharp drop in global oil prices, indicators of receding inflationary pressures on monetary policymakers at the Federal Reserve are increasing, which strengthens the probabilities of cutting American interest rates this year.

Price Overview

- Gold prices today: gold prices rose by 3.25% to ($4,857.56), the highest since March 19, from the opening level of trading at ($4,706.34), and recorded a low of ($4,706.34).

- At the settlement of prices on Tuesday, gold prices achieved an increase of 1.25%, marking the first gain in three days, supported by the decline of the US dollar.

US Dollar

The dollar index fell on Wednesday by 0.85%, deepening its losses for the third consecutive session and recording a four-week low at 98.69 points, reflecting a broad decline in the levels of the American currency against a basket of global currencies.

As is known, the decline in the levels of the American currency makes gold bullion priced in US dollars more attractive to buyers who hold other currencies.

Risk sentiment in the markets improved, and investor appetite for buying global assets and currencies increased following the ceasefire agreement between the United States and Iran.

Iran War Updates

- Washington and Tehran agree on a two-week ceasefire and plan to open the Strait of Hormuz.

- US President Donald Trump agreed to suspend attacks and aerial bombardment against Iran for 14 days, following intensive Pakistani and Qatari mediation.

- Iran announced its agreement to reopen the Strait of Hormuz to international navigation "fully and safely," with technical coordination with the Iranian armed forces to secure the passage of ships.

- Direct negotiations to end the war are scheduled to begin next Friday in the city of Islamabad in Pakistan, as the truce aims to provide an opportunity for a diplomatic solution.

Global Oil Prices

Global oil prices fell by an average of 13%, recording their lowest levels in several weeks, as concerns over global supply shortages receded, especially after the reopening of the Strait of Hormuz to giant oil tankers.

US Interest Rates

- According to the CME FedWatch tool from CME Group: the pricing of the probabilities of keeping American interest rates without any change in the upcoming April meeting is currently stable at 99%, and the pricing of the probabilities of raising interest rates by about 25 basis points is stable at 1%.

- After the pause in the war, traders began to price the existence of probabilities for an interest rate cut by the Federal Reserve this year.

- In order to re-price those probabilities, investors await later today the release of the minutes of the last monetary policy meeting of the Federal Reserve.

Expectations about Gold Performance

Nicholas Frappell, global head of markets at ABC Refinery, said: People entered this session believing that escalation was highly likely, but the announcement of a two-week truce turned this expectation upside down, and that was positive for gold.

Independent metals trader Tai Wong said: This is a temporary recovery, and it remains to be seen whether Iran will adhere to it. For gold, the 200-day moving average at $4,930, and then $5,000, will represent major obstacles.

SPDR Fund

Gold holdings at the SPDR Gold Trust fund, the largest global exchange-traded fund backed by the metal, remained without significant change on Tuesday, leaving the total at 1,054.42 metric tons, which is the highest level since last February 20.