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BTC Bitcoin returns to US$79,000: Markets interpret US-Iraq war signals and Federal Reserve interest rate hike expectations
Bitcoin (BTC) returned to the US$79,000 mark after the opening of Wall Street on Monday. As the market deeply analyzed the mixed signals about the US-Iraq war, cryptocurrency prices fluctuated.
Core Points
- Oil prices fell after U.S. President Donald Trump suggested that the war in Iran might be coming to an end, pushing Bitcoin above $79,000.
- Market expectations for a 25 basis point rate hike by the Federal Reserve rose to more than 90%.
- Bitcoin tested its 50-week exponential moving average (EMA) after Sunday's close fell below the key trend line.
One-hour chart of BTC/USD. Source: Cointelegraph/TradingView
WTI crude oil futures CFD one-day chart. Source: Cointelegraph/TradingView
Target interest rate probability comparison at the September 16 FOMC meeting (screenshot). Source: CME Group
Weekly chart of BTC/USD with 50 EMA. Source: Cointelegraph/TradingViewTrump mentions the end of the Iran war, boosting Bitcoin's rise
TradingView data shows that BTC/USD erased the weekend's decline, with an intraday increase of about 3%. As U.S. President Donald Trump raises the prospects of a peace deal with Iran, the crypto market is receiving new upward momentum.
Trump wrote in a post on Truth Social: "The failed Iranian state is eager to reach a deal quickly and urgently. I will decide whether the United States chooses to participate-and we are open to that."
U.S. stocks rose at the opening on Wall Street early Monday, but turned lower as uncertainty persisted about the fate of key oil transportation routes in the Middle East. As of press time, the S & P 500 index was down 0.3%.
In addition to the Strait of Hormuz, Saudi Arabia's East-West Pipeline and the Strait of Mandeb are also facing threats as the conflict extends beyond Iran. As of press time, the price of West Texas Intermediate Crude Oil (WTI) crude oil in the United States is still above US$100 per barrel, while Brent crude oil is trading at US$105 per barrel.
Later, Trump further reiterated his forecast for lower oil prices and indirectly hinted that the Iranian conflict was coming to an end, causing oil prices to fall slightly.
He wrote in another Truth Social post: "With the temporary exception of oil, prices are falling sharply. Once the military conflicts with the United States and Iran are over, oil prices will plummet like a stone, and it won't be long."
Markets focus on Fed wording and interest rate changes
The latest data from CME Group FedWatch Tool shows that the probability of a rate hike is 92.7%, up from 59.4% last week. The Federal Reserve will announce its latest interest rate adjustment decision on Wednesday, and the market generally predicts that it will raise interest rates by 25 basis points to the 3.75%-4% range.
Trading firm QCP Capital commented that continued high oil prices will directly affect U.S. financial policies. "Prolonged interruptions increase the risk that energy costs will be passed through to transportation and logistics pricing, which could drive up inflation expectations and limit the Fed's ability to pause tightening while slowing growth," they noted in Monday's article.
"This dynamic creates policy tensions: Continued energy prices may keep the Fed in a restrictive stance, while weak economic data due to energy costs may support a wait-and-see approach," the QCP added.
When discussing the impact of this week's Fed decision on the trend of Bitcoin prices, QCP believed that risky assets had already been included in a 0.25% interest rate hike, so it expected less volatility.
The previous lackluster overall response to last week's consumer price index inflation data means that Fed officials 'rhetoric is now more important than the decision itself. "This control reflects a shift in focus: the binary question of whether the Fed will raise interest rates has been answered; the key question of positioning now lies in how policymakers interpret this move and what path it foreshadows for the future," QCP wrote.
On Monday, BTC/USD returned above the 50-week exponential moving average (EMA) of US$77,430, after the K-line had closed below the EMA for a while. According to Cointelegraph, the 50-week EMA represents a key support target for bulls to recover and is part of the return of the bull market.
