Bitcoin (BTC) returned to $79,000 after Monday’s Wall Street open as markets shrugged off mixed signals on the US-Iran war.
Key points:
- Bitcoin climbed above $79,000 as oil prices fell after US President Donald Trump suggested the Iran war could be over.
- Markets peg the probability of a 25-basis-point Federal Reserve rate hike at more than 90%.
- Bitcoin tested its 50-week exponential moving average after closing below a key trend line on Sunday.
Bitcoin gains as Trump cites end of Iran war
Data from TradingView shows that BTC/USD is erasing its weekend losses and has gained around 3% on the day.
Cryptos saw fresh gains as US President Donald Trump raised the prospect of a peace deal with Iran.
“The failed nation of Iran wants a deal quickly and badly. I will determine whether or not the United States chooses to engage — an idea we are open to,” he said. wrote In a post on true social.
U.S. equities made early gains at Monday’s Wall Street open but later turned red amid ongoing uncertainty over the fate of oil-transit routes to the Middle East. The S&P 500 was down 0.3% at the time of writing.
In addition to the Strait of Hormuz, both Saudi Arabia’s east-west pipeline and the Bab el-Mandeb strait were threatened as the conflict expanded beyond Iran.
US WTI crude was above $100 per barrel at the time of writing, while Brent crude traded at $105 per barrel.
Trump later doubled down on predicting lower oil prices and hinted at an end to the Iran conflict, which sent oil prices down.
“With the temporary exception of oil, prices are falling sharply, and as soon as the military conflict with Iran ends, oil will drop like a rock, and it won’t for long,” a Separate Truth social media post said. Reading.
Latest information from CME Group FedWatch tool Probability increases to 92.7% from 59.4% a week ago.
Commenting on the developments, trading company QCP Capital predicted that continued high oil prices would directly affect US monetary policy. The Federal Reserve will announce its latest decision on interest rate changes on Wednesday, with markets predicting a 25-basis-point hike to 3.75-4%.
“A prolonged disruption would raise the risk of higher energy costs in transportation and logistics pricing, raising expectations of possible inflation and hampering the Fed’s ability to halt tightening as growth slows,” Written by QCP Monday, adding:
“This dynamic creates policy tension: Persistent energy prices could constrain the Fed, while economic data weakness from higher energy costs could argue for patience.”
Focus on Fed words shifts around moving interest rates
Discussing the impact of the week’s Fed decision for BTC price action, QCP argued that risk asset prices have already increased by 0.25%, with less volatility expected.
Related: Clarity Act Vote Coupled with Fed Rate Hike: Five Things to Know in Bitcoin This Week
The overall muted response to last week’s Consumer Price Index (CPI) inflation data, it argued, meant that Fed officials’ language now mattered more than decisions.
“This containment reflects a shift in focus: the binary question of whether the Fed will hike has been answered; the key issue for positioning is now how policymakers structure the move and what it signals about the way forward,” it wrote.
BTC/USD bounced back above its 50-week exponential moving average (EMA) on Monday after initially closing the weekly candle below $77,430. As Cointelegraph reported, the 50-week EMA represents a key support target for Bitcoin bulls to recover from as part of a bull-market comeback.
