Bitcoin broke above $65,000 on Monday, after the US and Iran announced a halt to attacks over the weekend, leading to a sharp drop in oil prices and a decline in immediate inflation concerns, as investors await the Federal Reserve meeting scheduled for this week.
The world's largest cryptocurrency rose 1.5% to $65,405.40 by 8:29 a.m., recovering from last week's volatility as investors returned to high-risk assets.
Bitcoin ended last week virtually unchanged amid volatile trading.
The cessation of US-Iranian conflict is driving down oil prices; all eyes are on the Federal Reserve's decision.
Market sentiment improved after Iran announced it would suspend its retaliatory attacks if Washington refrained from any further military action, while the United States in turn halted its military campaign, easing fears of a wider regional conflict.
This lull led to a sharp decline in oil prices, with Brent crude falling by more than 5%, helping to ease concerns that rising energy costs could reignite inflation and prompt central banks to maintain tighter monetary policy for longer.
Expectations of declining inflation have also contributed to the weakening of the US dollar, making dollar-denominated assets such as cryptocurrencies more attractive to foreign investors.
Investors' attention has now turned to the Federal Reserve meeting later this week. The US central bank is widely expected to leave interest rates unchanged on Wednesday, but traders will be closely watching Chairman Kevin Warsh's comments for clues about the direction of monetary policy for the rest of the year.
Markets currently estimate the probability of an interest rate hike at this meeting to be around one-third.
High interest rates typically reduce the appeal of speculative assets such as cryptocurrencies, as they raise returns on safer investments and tighten financial conditions.
The broader financial markets reflected an improved appetite for risk, with US stock futures rising and gold prices climbing alongside cryptocurrencies.
Major technology companies, including Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN), are scheduled to announce their financial results, while markets closely monitor their AI spending expectations and whether strong corporate results can extend the recent rally in risk assets.
Bitcoin has increasingly moved in tandem with technology stocks and other risk assets this year.
Cryptocurrency prices today: Altcoins rise, Ethereum jumps 4%
Most alternative cryptocurrencies rose on Monday, keeping pace with Bitcoin's gains.
Ethereum, the world's second-largest cryptocurrency, rose 4.1% to $1,959.92.
XRP, the third largest cryptocurrency, rose 1% to $1.109.
Solana advanced by 2%, while Cardano traded largely unchanged.
In the meme currency sector, Dogecoin declined by 0.8%.
