Bitcoin Rebounds Toward $74,000 as Iran Ceasefire Extension Hopes Boost Risk Appetite
Bitcoin recovered on Friday, climbing back toward the $74,000 level after falling to its lowest point in nearly seven weeks during the previous trading session. Improved market sentiment followed reports that the United States and Iran are moving closer to extending their current ceasefire agreement, encouraging investors to return to risk-sensitive assets.
The world’s largest cryptocurrency gained 0.8% to reach $73,736.6 during early trading hours.
Despite the rebound, Bitcoin remains under pressure after dropping close to $72,500 on Thursday. The cryptocurrency is currently on track for a weekly decline of around 4% and is also heading toward a similar monthly loss.
Iran Ceasefire Extension Reports Improve Market Sentiment
Investor confidence improved after reports suggested that Washington and Tehran had reached a preliminary agreement to extend their 60-day ceasefire arrangement. The proposal also reportedly includes easing restrictions on shipping through the Strait of Hormuz, although final approval from U.S. President Donald Trump is still required.
The prospect of reduced geopolitical tensions in the Middle East helped support global stock markets while weighing on oil prices. As a result, traders showed a renewed willingness to invest in higher-risk assets, including cryptocurrencies.
Bitcoin had faced selling pressure a day earlier after fresh U.S. military strikes targeting Iran-linked positions prompted investors to seek refuge in traditional safe-haven assets.
Inflation Data Strengthens Higher-For-Longer Rate Expectations
Market participants also continued to assess recent U.S. inflation data, which reinforced expectations that the Federal Reserve could maintain elevated interest rates for an extended period.
The Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation measure, increased 3.8% year-over-year in April. The reading marked the fastest pace of inflation growth in approximately three years.
Persistent inflation has strengthened expectations that interest rates may remain higher for longer, a trend that has generally weighed on cryptocurrencies and other speculative investments throughout the year.
Bitcoin Remains Below Recent Highs
Although Friday’s recovery provided some relief, Bitcoin remains significantly below its May peak above $82,000.
The cryptocurrency is also facing pressure from continued institutional selling, as investors have been withdrawing funds from spot Bitcoin exchange-traded funds (ETFs).
According to market data, crypto ETF outflows have exceeded $2.5 billion over the past two weeks as geopolitical uncertainty and macroeconomic concerns continue to influence investor behavior.
Altcoins Post Modest Recovery
The broader cryptocurrency market also showed signs of stabilization after sharp losses earlier in the week.
Ethereum, the second-largest cryptocurrency by market capitalization, rose 1.6% to $2,014.92.
XRP gained 2.3% to trade at $1.32, while Solana and Polygon each advanced around 1%.
Cardano outperformed several major altcoins with a gain of 2.6%, while meme cryptocurrency Dogecoin added 1.7%.
The modest rebound across digital assets reflects improving risk sentiment, although traders remain focused on geopolitical developments, inflation trends, and the Federal Reserve’s future policy decisions.
