The policies of the US Federal Reserve and conflicts in the Middle East are putting significant pressure on Bitcoin and other cryptocurrencies, although a market recovery is expected in the future.
Cryptocurrencies React to Fed’s Interest Rate Stance and Middle East Conflict
The Fed is expected not to change interest rates at the current meeting. However, futures markets predict only one or two rate cuts by year-end, down from earlier expectations of three or four. Investors are concerned about potential inflation triggered by tariffs, which could keep monetary policy restrictive and suppress demand for cryptocurrencies.
Hopes for a Recovery in the Second Half of the Year
Last week, Bitcoin initially fell below $103,000 following Israel’s airstrike on Iran. Tensions have since escalated, with Bitcoin currently trading around $105,000.
Analysts' Forecasts
Analysts concur that the market remains dependent on the Fed’s interest rate decision announcements and news from the Middle East, with prices expected to move within a defined range until clearer signals emerge. Meanwhile, Bitcoin option open positions remain close to record levels, indicating a measure of investor confidence.
Thus, the current state of the cryptocurrency market is influenced by both internal monetary policies and external economic factors. Investors are awaiting changes that may affect future price movements.
