Crypto Markets Surge Amid De-Escalation in Strait of Hormuz and Weakening Dollar

Crypto markets have shown significant resilience in the face of geopolitical tensions, with this week marking the strongest weekly gains since the Iran war began. One key factor contributing to this surge was the de-escalation signals emanating from the Strait of Hormuz. Two tankers successfully transited through the strait on Sunday, marking the first commercial passage since the conflict commenced. Additionally, Iran's foreign minister narrowed the shipping blockade to 'enemy' vessels only.

These developments have had a positive impact on oil prices, which have pulled back from their highs. The weakening dollar has also played a role in the rally, with S&P futures posting their first gain in five days. As a result, short sellers have paid the price, with $344 million in liquidations over 24 hours.

The options market is now eyeing the $75,000 strike, where roughly 8,000 contracts of March 27 calls sit. A push above this level could force dealers to hedge aggressively, potentially accelerating the move. However, the inflation picture may look different than it did a week ago, with oil still elevated but Hormuz reopening.