Bitcoin prices saw a sharp rebound this week, rising above $107,000 after briefly falling below $100,000 over the weekend, amid renewed investor optimism and speculation about a possible policy shift by the US Federal Reserve, Forbes reports.
The recent surge follows geopolitical turbulence in the Middle East, including heightened tensions between Israel and Iran, which had previously caused significant volatility in the cryptocurrency markets. However, Bitcoin has since regained momentum, nearing its all-time high of around $112,000.
Bitcoin’s quick recovery has drawn attention from analysts and investors alike, who point to its evolving role in the global financial system.
“Bitcoin’s status as a safe-haven asset is still taking shape,” said Gadi Chait, head of investment at Xapo Bank. “Its V-shaped recovery back above $105,000 in under 48 hours after falling into the nineties highlights its growing liquidity and integration into mainstream portfolios.”
Unlike traditional assets such as gold or equities, Bitcoin’s response to recent global shocks has been notably distinct, with many viewing its resilience as a sign of maturing market dynamics.
Market focus now shifts to Federal Reserve Chair Jerome Powell’s semi-annual testimony before Congress, seen as a potential inflection point for US monetary policy. The testimony follows growing speculation that the Fed could soon begin lowering interest rates, a development that many believe could further boost interest in riskier assets like cryptocurrencies.
“All eyes are on Powell’s remarks and Friday’s inflation data to determine how close the Fed is to a policy pivot,” said Ray Youssef, CEO of crypto platform NoOnes. “A dovish shift or a de-escalation in geopolitical tensions could serve as strong catalysts for renewed investment in Bitcoin.”
This sentiment was echoed by market watchers on social media, where calls to “buckle up” circulated, alongside predictions of increased capital inflows into crypto should the Fed begin easing rates.
Former President Donald Trump added fuel to speculation by calling for aggressive rate cuts, suggesting the Fed should reduce interest rates by two to three percentage points. Trump’s comments, posted on his Truth Social platform, criticized Powell and urged immediate action to “save the US more than $800 billion per year.”
Some Federal Reserve officials have also begun signaling support for lowering rates. Vice Chair for Supervision Michelle Bowman and Chicago Fed President Austan Goolsbee recently acknowledged that current economic conditions may warrant easing monetary policy sooner rather than later.
According to the CME FedWatch Tool, the probability of a rate cut in July has risen to 22%, up from 10% just a week earlier.
