President Donald Trump has welcomed the latest rise in the US stock market. The rally followed signs of progress surrounding the US-Iran peace agreement.
At the same time, falling oil prices could ease inflation pressure and potentially support risk assets. However, the Federal Reserve’s hawkish position continues to create uncertainty for stocks, Bitcoin, and the wider crypto market.
Trump Praises the US Stock Market Rally
During a recent press conference, Trump said financial markets reacted positively whenever the possibility of peace increased.
According to Trump, investors viewed diplomatic progress as a positive signal. As a result, the stock market moved higher whenever officials discussed an agreement between the United States and Iran.
Major US stock indexes have recently recorded strong gains. The S&P 500 also climbed above the 7,400 level and reached new record territory.
However, the Federal Reserve’s latest policy decision has complicated the outlook. Concerns about tighter monetary policy are putting pressure on equities, Bitcoin, and other risk-sensitive investments.
Fed Chair Kevin Warsh maintained a hawkish tone during the June FOMC meeting. This increased speculation that interest rates could remain elevated or potentially rise again.
Higher interest rates usually make risk assets less attractive. Therefore, the Fed’s position could limit the strength of any immediate market recovery.
Could Falling Oil Prices Support a Crypto Recovery?
Despite the Federal Reserve’s cautious outlook, some analysts believe falling oil prices may eventually benefit the crypto market.
WTI crude oil was trading near $74.76 per barrel at the time of reporting. This represented a monthly decline of more than 28%.
Meanwhile, Brent crude fell to approximately $77.70 per barrel. Its price had dropped by more than 30% during the same period.
Lower energy costs can reduce inflation across the economy. Businesses may face lower transportation and production expenses, while consumers could spend less on fuel.
As inflation pressure weakens, the Federal Reserve may have less reason to maintain an extremely restrictive monetary policy.
Therefore, the continued decline in oil prices following the US-Iran agreement could create more favorable conditions for Bitcoin and other cryptocurrencies.
However, the upcoming Personal Consumption Expenditures inflation data will remain important. Inflation may need to fall below the Fed’s 3% level before policymakers consider taking a more dovish approach at the September FOMC meeting.
Bitcoin Approaches Critical $64,000 Support
Bitcoin is now trading inside an important technical range between approximately $63,800 and $65,000.
Crypto analyst Michaël van de Poppe questioned whether Bitcoin could hold this area over the next 48 hours. He noted that bond yields had started declining after the FOMC meeting, while oil prices continued to fall.
These developments would normally support risk assets. However, weakness surrounding Strategy’s STRC preferred stock may be adding pressure to Bitcoin.
STRC recently fell below its $100 par value and traded near $89. Since Strategy uses this financial instrument to support additional Bitcoin purchases, its decline may have affected confidence in the market.
If Bitcoin moves firmly above $65,000, Van de Poppe believes the price could advance toward the $72,000 to $75,000 range. Such a move would represent an increase of roughly 15% and could lift the wider crypto market.
What Happens if Bitcoin Loses $64,000?
Analyst Ted Pillows also identified $64,000 as Bitcoin’s most important short-term support level.
According to his analysis, Bitcoin faces resistance near $67,100 and $70,700. However, the downside risk could increase if the price fails to remain above $64,000.
A successful defense of this support zone could open the door to a recovery toward $67,000 or $68,000.
On the other hand, a clear break below $64,000 may push Bitcoin back toward the $61,000 to $62,000 region. A deeper sell-off could potentially bring the $60,000 level into focus.
Can the Crypto Market Recover?
The crypto market remains caught between improving economic conditions and continued monetary policy risks.
Falling oil prices and lower bond yields could reduce inflation concerns. This may eventually encourage the Federal Reserve to adopt a less aggressive policy stance.
However, Bitcoin must first hold the $64,000 support zone and regain the $65,000 level. Until that happens, the risk of further downside remains present.
The next major move may depend on oil prices, inflation data, Federal Reserve expectations, and Bitcoin’s ability to protect its key technical support.
