CryptoSlate
Bitcoin reclaimed $65,000 on Monday as a temporary halt in US-Iran strikes revived demand for risk assets ahead of the Federal Reserve’s two-day policy meeting. The largest cryptocurrency traded around $65,155, up roughly 1% on the day, while Ether climbed about 4% to near $1,964, its highest level since early June. Brent crude dropped 6.5% to roughly $90.45 a barrel as traders cut the geopolitical premium that had pushed oil above $100 last week. The question now is whether the relief trade survives contact with the Fed.
Why it matters
The oil shock has already reshaped rate expectations. Fed funds futures on Monday priced roughly a one-in-three chance of a 25-basis-point hike when the FOMC concludes Wednesday, up from about 16% a week earlier, even as two-thirds of the market still expects the target range to stay at 3.50% to 3.75%. Markets also price about a 77% probability of a rate increase by September.
The inflation backdrop complicates the decision. The June CPI report showed a 0.4% monthly drop in consumer prices, the largest since April 2020, with annual inflation easing to 3.5% and core inflation cooling to 2.6%. The catch is that much of that disinflation came from a 5.7% monthly decline in the energy index, a move the subsequent crude surge has since partially reversed. June’s June projection materials already flagged supply shocks and energy as contributing to elevated inflation, with the median Fed official projecting the federal funds rate at 3.8% by year-end 2026 and nine of 18 officials placing their terminal estimate above the current midpoint.
Market impact
The positioning tells the story. Glassnode data show Bitcoin’s options put-to-call ratio has fallen to about 0.52 from roughly 0.76 in late June, with calls now making up a larger share of open interest. One-week at-the-money implied volatility sits near 34.3% versus about 40.8% for six-month contracts, and the one-week 25-delta skew has dropped to around 4% while three- to six-month readings remain near 11% to 12%. Traders are more comfortable with the next few days than with anything beyond them, which leaves the Fed decision and Thursday’s Q2 GDP print as the near-term catalysts that can either validate the rebound or pull Bitcoin back into the trade that drove last week’s selloff.
Frequently asked questions
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What is the main risk to Bitcoin’s $65,000 rebound?
The main risk is that last week’s oil surge has already repriced rate expectations, leaving Wednesday’s Fed decision capable of extending the rebound or putting renewed pressure on Bitcoin.
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What are markets pricing for the Fed’s Wednesday decision?
Fed funds futures on Monday priced a roughly one-in-three chance of a 25-basis-point hike, up from about 16% a week earlier, with about two-thirds of the market still expecting the target range to stay at 3.50% to 3.75%.
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How does Thursday’s Q2 GDP report factor in?
The Commerce Department is scheduled to release its first estimate of second-quarter GDP alongside June personal income and spending data, including the Fed’s preferred PCE inflation measures, less than 24 hours after the Fed decision.
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What does Bitcoin options positioning signal about the rebound?
Glassnode data show Bitcoin’s options put-to-call ratio has fallen to about 0.52 from roughly 0.76 in late June, with one-week at-the-money implied volatility near 34.3% versus about 40.8% for six-month contracts, suggesting near-term comfort but longer-term caution.
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Why did the June CPI report complicate the Fed’s decision?
Consumer prices fell 0.4% on the month in June, with annual inflation easing to 3.5% and core inflation cooling to 2.6%, but much of that disinflation came from a 5.7% decline in the energy index, a move the subsequent crude surge has partially reversed.
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