Bitcoin, Crypto Rebound After Israel-Iran Crisis Spurs Market Jitters

HomeNews* Bitcoin and other cryptocurrencies recovered after a recent drop triggered by geopolitical tensions between Israel and Iran.

• The price of bitcoin moved back above $100,000 following comments from Donald Trump predicting significant crypto investment.
• Investors are watching for potential U.S. Federal Reserve action, especially chair Jerome Powell’s congressional testimony and upcoming inflation data.
• Several Federal Reserve officials indicated support for lowering interest rates, with a decision possibly coming as early as July.
• Expectations of rate cuts have led some traders to predict increased capital moving into the crypto market. Bitcoin and major cryptocurrencies rebounded following a steep decline caused by increasing tensions in the Israel-Iran conflict. The recovery occurred as the Bitcoin Price climbed back above $100,000 and traders responded to signals from U.S. political and financial leaders.

• Advertisement - Donald Trump posted overnight on Truth Social urging the Federal Reserve to lower interest rates by at least two to three points. He said this action could save the U.S. over $800 billion per year. The Federal Reserve left rates unchanged last week, pausing after a period of rate reductions.

Market attention is now focused on upcoming testimony from Federal Reserve chair Jerome Powell in Washington. “Aside from any geopolitical updates, today’s key event will be Fed chair Jerome Powell’s testimony in Washington,” said David Morrison, senior market analyst at Trade Nation. Experts are also looking for signals from the Fed’s preferred inflation metric, the Personal Consumption Expenditures (PCE) index, due later in the week.

Some traders believe a dovish approach from the central bank, which means favoring lower interest rates, or a reduction in global tensions could drive increased interest in cryptocurrencies. Ray Youssef, CEO of NoOnes, stated via email, “The most bullish scenario would be confirmation of a Fed dovish policy pivot or a major de-escalation in global trade and geopolitical tensions, either of which could spark renewed interest in risk assets and push bitcoin towards retesting its all-time high.”

The possibility of interest rate cuts in July has gained traction among investors. According to the CME FedWatch tracker, the likelihood of a rate cut in July rose to 22%, up from 10% last week. Some on social media predict that such a move could cause trillions of dollars to enter crypto markets.

Federal Reserve vice chair for supervision Michelle Bowman, Chicago Fed president Austan Goolsbee, and Fed governor Christopher Waller all signaled it might be time to consider lowering rates. Bowman told a gathering in Prague, “It is time to consider adjusting the policy rate.” Goolsbee commented that Trump’s trade tariffs have not had the feared impact. Waller told CNBC, “If you’re starting to worry about the downside risk [to the] labor market, move now, don’t wait.”

Jerome Powell has cited inflation concerns due to the prospect of trade tariffs as a reason for a cautious approach to changing rates. However, Waller noted that the expected inflation risk from tariffs might not justify holding off on rate cuts.

• Advertisement - Investors now await further statements from Federal Reserve officials and upcoming economic data to gauge the timing of potential policy changes.

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• Mastercard joins Paxos Global Dollar Network to boost stablecoins
• Crypto Markets Rally as Trump Brokers Iran-Israel Ceasefire
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