With the threat of an immediate oil supply crunch fading, traders moved back into risk assets. The price of bitcoin (BTC) rose to near $107,000, adding 1.7% in the past 24 hours. The broader CoinDesk 20 (CD20) index gained 1%.
That advance may be short-lived.
“’Optimism about the fragile ceasefire holding between Iran and Israel has bubbled through markets, lifting equities, but more doubts are now creeping in about the truce holding,” said Susannah Streeter, the head of money markets at Hargreaves Lansdown.
“A leaked report from U.S. Intelligence casting doubt on the effectiveness of the U.S. strikes in crippling Tehran’s nuclear capabilities, has led to some worries that military action could resume,” she said.
Still, the ceasefire wasn’t the only reason for the rally. On Tuesday, Federal Reserve Chair Jerome Powell told House lawmakers that the central bank is being patient before moving forward with interest-rate cuts. Powell pointed out that inflation is still elevated and could face additional pressure from tariffs in coming months.
“Powell’s emphasis on a wait-and-see” approach underscores short-term uncertainty in rate policy,” Bitunix analysts wrote in an emailed statement. “The remarks provide markets with flexibility and are overall supportive of risk assets, but investors should closely monitor upcoming tariff developments and inflation data.”
U.S. consumer-confidence data softened, pulling two-year Treasury yields to a six-week low of 3.78% and raising the perceived chances of a rate cut in July to about 20%, according to the CME’s FedWatch tool. That's up from about 13% a week ago. On Polymarket, traders are weighing an 18% chance of a cut.
Powell will later today testify before a Senate committee. Traders will keep a close eye on the testimony, which comes as President Donald Trump keeps pressure on the Fed to lower interest rates, posting yesterday they should be “at least two to three points lower.”
Crypto derivatives desks show a neutral approach around the 27 June expiry: Traders sold straddles and short puts close to $105,000 and $100,000, suggesting an expectation of tight price action, Jake O, OTC trader at Wintermute, said.
Call option buying eyeing $108,000 and $112,000 for July and September points, however, to a modest bullish inclination, Jake added. Stay alert!
