Bitcoin (BTC) Surges Past $106,000 on Geopolitical News, Fed Policy Eyed by Traders

The cryptocurrency market experienced a period of extreme volatility over a 72-hour window, culminating in a significant rally late Monday in the U.S. The primary catalyst was a reported ceasefire between Iran and Israel, a development that sent shockwaves through global risk assets. Bitcoin (BTC) was at the forefront of this surge, climbing nearly 3% in the hours following the news. The leading cryptocurrency rocketed past the $106,000 mark, a remarkable recovery after plunging to a low of approximately $98,500 just over 24 hours prior. At the time of the report, BTC had slightly retraced to $105,300. The relief was palpable across markets; U.S. stock index futures saw gains of around 0.5%, while the price of crude oil, a key barometer of geopolitical tension, tumbled from a high of $75 to just $65 per barrel. The positive sentiment was not confined to Bitcoin, as several major altcoins posted even more dramatic gains. Ether (ETH), XRP (XRP), and Solana (SOL) all recorded impressive 8% to 10% increases, underscoring a broad-based risk-on move. Initial confusion around the announcement was later clarified when, according to Reuters, a senior Iranian official confirmed that Tehran had agreed to the proposed ceasefire.

Powell's Patience and Rate Cut Hopes

While the ceasefire provided the initial explosive momentum, the market's bullish structure was also supported by macroeconomic factors, specifically commentary from the U.S. Federal Reserve. Fed Chair Jerome Powell, in a testimony to House lawmakers, indicated that the central bank would remain patient before implementing interest-rate cuts. Powell highlighted that inflation remains elevated and could face new pressures. Analysts from Bitunix noted that Powell's “wait-and-see” approach, while acknowledging uncertainty, ultimately provides flexibility and is seen as supportive for risk assets like cryptocurrencies. This sentiment was further bolstered by softening U.S. consumer-confidence data, which contributed to two-year Treasury yields falling to a six-week low of 3.78%. The move in yields directly impacted rate cut expectations, with the CME FedWatch tool showing the perceived chance of a July rate cut climbing to 20%, up from 13% just a week ago. Traders on Polymarket are pricing in a similar 18% chance of a cut, indicating a tangible shift in market expectations toward a more accommodative monetary policy, which is historically favorable for assets like Bitcoin.

Derivatives Market Signals Cautious Optimism

A closer look at the crypto derivatives market reveals a nuanced picture of trader sentiment. According to Jake O, an OTC trader at Wintermute, positioning around the upcoming June 27 expiry suggests a neutral, range-bound expectation in the immediate term. He noted that traders were actively selling straddles and short puts with strike prices near $105,000 and $100,000, a strategy that profits if BTC price action remains contained within that tight range. However, looking further out, a modest bullish inclination emerges. Call option buying for July and September expiries has been concentrated at the $108,000 and $112,000 strike prices, signaling that some traders are positioning for further upside in the medium term. The annualized three-month BTC futures basis on offshore exchanges has advanced to 5%, reflecting the stabilization in sentiment following the rebound above $100,000. However, this level remains below the highs seen in May, suggesting that while optimism has returned, a degree of caution persists among derivatives traders.

Altcoins, Equities, and ETF Flows Reflect Bullish Conviction

The bullish tide lifted all boats, with strong performance seen in specific altcoin pairs and crypto-correlated equities. The Binance-listed XRP/BTC pair continues to trade within a falling wedge pattern, a technical formation that often precedes a bullish trend reversal as the downtrend loses momentum. Meanwhile, the equity market saw a surge in crypto-related stocks. Coinbase Global (COIN) jumped over 12%, while Bitcoin mining firms like Riot Platforms (RIOT) and CleanSpark (CLSK) posted gains of 8.09% and 13.45%, respectively. This demonstrates a strong correlation and a spillover of positive sentiment from the digital asset space into traditional financial markets. Adding to the bullish case were the significant inflows into spot Bitcoin ETFs. According to data from Farside Investors, these investment vehicles saw a daily net inflow of $588.6 million, bringing the cumulative net flows to an impressive $47.58 billion. These substantial inflows are a clear indicator of growing institutional demand and conviction in Bitcoin as a macro asset, providing a strong support floor for the market's recent gains.