Oil Prices Crash 20% After Ceasefire Deal as BTC and Gold Surge

Almost all financial markets reacted positively to the big development, aside from oil.

After a few consecutive days of warning shots, the US and Iran reached a two-week cease-fire, which would allow them to negotiate for a permanent peace deal.

Financial markets responded immediately to the news, but in opposing ways. While most assets, such as BTC, gold, and stocks, went up, oil, which had rocketed after the war began, dumped hard.

Oil Slides

Given the significance of the region, oil prices were impacted the most after the initial strikes began on February 28. USOIL traded below $70 per barrel at the time, but skyrocketed to $120 in just a week or so. More volatility ensued in the following weeks following comments and strikes against different infrastructure.

The latest threats from Trump against Iran, which included attacking the country’s power plants and bridges, caused another sharp uptick at the end of last week and the beginning of the current one. His statement from yesterday that “a whole civilization will die tonight” was particularly worrying, which led to Iran backing out of the negotiations at the time, according to reports.

Hours later, though, Trump announced on his social media platform that both parties had agreed to a two-week cease-fire as Iran would safely open the Strait of Hormuz. He added that the US had received a 10-point proposal from Iran, and they believe “it is a workable basis on which to negotiate.”

“Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two-week period will allow the Agreement to be finalized and consummated.”

Later on, he explained that the US will be “helping with the traffic buildup in the Strait of Hormuz” as “big money will be made.” He also predicted that this would be the “Golden Age of the Middle East.”

Oil prices reacted immediately with a sharp nosedive. USOIL went from $117 to under $92 before it recovered to $95 as of press time. Nevertheless, it’s still 40% higher than it was before the war started.

You may also like:

BTC, Gold, Stocks on the Rise

All financial markets experienced enhanced volatility after the announcement. Bitcoin skyrocketed from just over $68,000 to a three-week peak at almost $73,000 before it corrected to $72,000 as of press time. Ethereum has risen by almost 7% and now sits close to $2,250. XRP, SOL, DOGE, and other altcoins have also marked notable gains of over 4%.

Gold neared $4,900 for the first time in three weeks after jumping from $4,650. The S&P 500 futures are up by over 2.5% and are just inches away from tapping a new all-time high.