Bitcoin moved back above $65,000 on Monday as easing tensions between the United States and Iran improved global risk sentiment.
The temporary halt in military action also pushed oil prices sharply lower. This reduced immediate inflation concerns ahead of the Federal Reserve’s closely watched policy meeting.
Bitcoin was trading 1.5% higher at $65,405.40 by 01:29 ET, or 05:29 GMT. The cryptocurrency recovered from the previous week’s volatile trading, which left its price largely unchanged.
US-Iran De-escalation Supports Bitcoin
Investor confidence improved after Iran said it would suspend retaliatory attacks, provided that Washington avoided further military action.
The United States also paused its bombing campaign. These developments eased fears that the conflict could expand across the Middle East and disrupt global markets.
The reduction in geopolitical risk encouraged investors to return to cryptocurrencies, technology stocks and other risk-sensitive assets.
Falling Oil Prices Ease Inflation Concerns
Brent crude oil fell by more than 5% following the pause in hostilities.
Lower oil prices helped reduce concerns that rising energy costs could create another inflation shock. Persistent inflation could force central banks to keep interest rates higher for longer.
The improved inflation outlook also placed pressure on the U.S. dollar. A weaker dollar can make dollar-denominated assets, including Bitcoin and other cryptocurrencies, more attractive to international investors.
Federal Reserve Decision Comes Into Focus
Market attention has now shifted to the Federal Reserve’s policy announcement on Wednesday.
The U.S. central bank is widely expected to leave interest rates unchanged. However, traders will closely monitor Chair Kevin Warsh’s comments for signals about the direction of monetary policy during the rest of the year.
Markets currently estimate roughly a one-third chance that the Fed will raise rates at this meeting.
Higher interest rates generally reduce demand for speculative assets such as cryptocurrencies. They increase the potential returns available from safer investments while also tightening financial conditions.
Risk Appetite Improves Across Global Markets
The improvement in sentiment was not limited to cryptocurrency markets.
U.S. stock futures advanced, while gold and several major digital assets also moved higher. The broad market reaction suggested that investors were becoming more comfortable holding risk-sensitive assets following the reduction in geopolitical tensions.
Bitcoin has increasingly traded in line with technology stocks and other high-risk assets this year. Changes in interest-rate expectations, liquidity and investor confidence have therefore become important drivers of its price.
Major Technology Earnings Could Influence Markets
Investors are also preparing for earnings reports from several major U.S. technology companies.
Microsoft, Meta Platforms, Apple and Amazon are scheduled to release their latest results. Markets will focus on their plans for artificial intelligence spending and whether strong earnings can extend the recent rally in risk assets.
Positive results could provide additional support for technology stocks and cryptocurrencies. However, disappointing forecasts may create renewed volatility.
Ethereum Leads Altcoin Gains
Most major altcoins traded higher on Monday, following Bitcoin’s recovery.
Ethereum gained 4.1% to trade at approximately $1,959.92, outperforming Bitcoin during the session.
XRP rose around 1% to $1.109, while Solana advanced by approximately 2%. Cardano remained broadly unchanged.
Meme cryptocurrencies delivered mixed results, with Dogecoin falling around 0.8%.
The wider crypto market benefited from lower oil prices, a softer U.S. dollar and improving investor risk appetite. However, the Federal Reserve’s decision and the upcoming technology earnings could determine whether the recovery continues.
