Bitcoin rebounds above $74,000 in 'risk-on snapback' despite persisting Middle East tensions

Bitcoin, Ethereum, and other major cryptocurrencies rebounded late Monday in a "classic risk-on snapback," as traders continue to digest the protracted U.S.-Iran conflict, analysts said.

Bitcoin climbed 4.9% over the past 24 hours to $74,414 as of 12:55 a.m. ET Tuesday, offsetting weekend losses, according to . The world's largest cryptocurrency fell to a low of around $70,600 earlier in the day.

Ether jumped 7.9% to $2,365, while XRP added 3.2% to $1.37, and Solana gained 4.9% to $85.97. , which tracks the performance of the top 30 cryptocurrencies, rose 4.9%.

The crypto market rebound came alongside a broader rally in U.S. stocks, with crypto-related equities closing higher on Monday. Circle jumped 12%, Bullish rose 7.5%, and Coinbase gained 3.9%.

Risk-on snapback

"This looks like an all-risk rally than a crypto-only rebound," Rick Maeda, research associate of Presto Research, told The Block. "Equities have now fully retraced the Iran invasion move and are trading above pre-war levels, while crypto saw a reversal of positioning with BTC back near $74,000 and ETH bouncing even harder as higher beta catches up."

U.S. Vice President JD Vance Monday that Washington has made substantial progress in talks with Iran and expects Tehran to take further steps toward reopening the Strait of Hormuz.

Vance's comments were perceived by many as a positive signal. "The market had priced in a meaningful geopolitical premium around Iran and Hormuz, and the latest Vance comments on substantial headway and a path toward reopening the strait gave investors room to take some of that premium back out," said Maeda.

Dominick John, analyst of Zeus Research, shared similar views, saying that the market rebound was a "classic risk-on snapback," driven by macro relief, strong exchange-traded fund inflows, and aggressive whale accumulation around key support levels. 

However, analysts cautioned that the rally is still fragile. Maeda said that the crypto move was still largely headline-driven, leaving it sensitive to shifts in the narrative around de-escalation, ceasefire durability, and progress in reopening Hormuz.

Ongoing conflict

The U.S. and Iran are still actively communicating despite a failed peace talk in Pakistan over the weekend. U.S. officials are discussing plans for a potential second meeting, according to .

Meanwhile, Trump's order to impose a naval blockade on the Strait of Hormuz took effect Monday after Iran's closure of the critical chokepoint. Vice President JD Vance accused Iran of "economic terrorism" by closing the strait, defending the U.S. blockade of Iranian ports as a proportional response. 

Tensions surrounding the Strait of Hormuz, through which roughly one-fifth of global oil flows, continued to affect oil prices. WTI crude oil fell 2% to $96.8 per barrel after briefly rising to around $105 on Sunday.

"[Given] that there is still no actual deal, traders will be watching the next Iran-U.S. headline, oil, and whether the broader risk rally can hold," said Maeda.

John of Zeus said that traders are watching key levels around $70,000 support and $72,000-$75,000 resistance, while monitoring whether ETF inflows continue to back the move. 

Nick Ruck, director of LVRG Research, said the rally could maintain its momentum if supportive ETF flows continue. Traders are closely watching bitcoin dominance, macro data releases, energy market developments, and Federal Reserve signals for signs of sustainability or reversal, Ruck added.