Washington and Tehran Agreement Pushes Bitcoin to Highest Level in Two Weeks

SadaNews - Bitcoin has risen to its highest level in nearly two weeks today, Monday, as risk appetite improved in the markets following the announcement that the United States and Iran reached an agreement to end the conflict and reopen the Strait of Hormuz.

The largest cryptocurrency surged by 1.9% to $65,620 at the time of writing, after hitting a high of $65,935 during the session, marking a new recovery following a wave of turbulence that recently drove it below $60,000 to its lowest level since October 2024.

The gains extended to other major cryptocurrencies:

Ether rose by 2.4% to $1,715.77.

Solana climbed by 4.4% to $71.21.

XRP increased by 2.6% to $1.18.

The rise in cryptocurrencies was part of a broader wave in high-risk assets after US President Donald Trump announced that the peace agreement with Iran "is finalized", and that the United States will end its blockade of the Strait, a crucial trade route for global energy flows.

The geopolitical risk premium in the markets declined as oil prices fell, with Brent crude futures dropping to $84.01 a barrel, down 3.8%, as traders bet that reopening Hormuz would ease supply risks that have pressured the markets over the past weeks.

Cautious Recovery

Bitcoin has been under significant pressure recently after the company "Strategy," founded by Michael Saylor and the largest institutional buyer of the cryptocurrency, revealed that it sold a small portion of its holdings this month, which triggered a wave of selling exacerbated by outflows from Bitcoin-linked exchange-traded funds.

Bloomberg quoted Pratik Kala, a portfolio manager at the digital assets hedge fund Apollo Crypto, as saying that the key level to watch for Bitcoin is $67,000, as several technical factors including trading volumes and moving averages converge at that point.

Kala added that the risks associated with Strategy have not yet dissipated, but the market is temporarily overlooking them amid improved risk appetite following the US-Iran agreement.

Cryptocurrencies are among the assets most affected by shifts in risk appetite and yield rates in the markets, typically benefiting from expectations of monetary easing and increased liquidity, while coming under pressure when bond yields rise or possibilities of tightening monetary policy increase.

Federal Reserve on Alert

The recovery comes ahead of the Federal Reserve's Open Market Committee meeting on June 16 and 17, which investors are watching for signals regarding the future path of interest rates following months of market volatility and rising energy-related inflation risks.

Bloomberg quoted Sean McNulty, derivatives trading manager for the Asia-Pacific region at FalconX, as saying that this week revolves around the Fed meeting on Wednesday, adding that markets expect a transition from easing to a neutral or hawkish stance, and that any surprises leaning towards hawkishness would pose the main downside risk to cryptocurrencies.

According to the Federal Reserve's schedule, the June meeting will be accompanied by the release of the economic projections summary, which will provide markets with additional signals regarding policymakers' estimates for growth, inflation, and interest rates in the upcoming period.