Bitcoin breaks US$79,000, Trump's remarks on Iraq war trigger oil prices to fall

Bitcoin returns to US$79,000 mark: Expectations of geopolitical easing resonate with probability of a Federal Reserve rate hike

On Monday, Bitcoin regained its foothold in the key US$79,000 area as traders reassessed the prospects of a conflict between the United States and Iran and the Federal Reserve's expectations of next move. Previously, Trump's remarks raised the possibility of easing tensions, helping oil prices fall; at the same time, interest rate probability models further pointed to a possible rate hike later this week.

According to TradingView data cited by Cointelegraph, BTC/USD smoothed out weekend losses, rising about 3% on the day, and returning to above about $77,430 near the 50-week indexed moving average (EMA)-a point the asset had previously closed below this key level on Sunday. At the same time, markets remained highly focused on the Federal Reserve's decision on Wednesday, with policy pricing reflecting renewed confidence that interest rates would rise further.

Core Points

• Weak oil prices pushed Bitcoin back past the $79,000 mark after U.S. President Donald Trump commented on potential progress towards an Iran deal.
• CME Group's FedWatch tool showed that the probability of a 25-basis point rate hike at the September 16 FOMC meeting rose to 92.7%, compared with 59.4% a week ago.
• BTC/USD regained its 50-week EMA at around US$77,430 after closing below trend on Sunday.
• QCP Capital believes that continued high energy prices may bring "policy tension" to the Fed-that is, maintaining restrictive interest rates while exacerbating the trade-off between growth and inflation.

Trump's remarks boosted risk appetite, and oil prices fell in response

The upward momentum of cryptocurrencies is closely related to new optimism that the United States and Iran are expected to reach a deal. Trump posted on Truth Social that Iran "wants to reach a deal" and said he would decide whether to involve the United States. In another Truth Social post, he hinted that once the military conflict ends,"oil prices will plummet like a cliff."

The U.S. stock market responded positively to this at the beginning of the opening, but as uncertainty about oil transportation routes in the Middle East persisted, market sentiment gradually cooled. The Strait of Hormuz remains the focus, while as the conflict extends beyond Iran, Saudi Arabia's east-west pipeline and the Strait of Mandeb are also at risk.

Trends in energy prices reflect changes in narrative. As of press time, WTI crude was trading above $100 a barrel and Brent crude was trading at about $105, although the direction of oil prices still fluctuated with the latest expectations for the trajectory of the conflict.

The probability of a Fed rate hike soars again before the decision

While geopolitical headlines drive one part of the market's logic, interest rate expectations make up another. According to CME Group's FedWatch tool, the probability of a 25 basis point rate hike at the September 16 FOMC meeting climbed to 92.7%, a sharp increase from 59.4% a week ago.

QCP Capital pointed out that the link between energy prices and policy is at the core of investors 'interpretation of the Fed's actions. The company warned in market notes on Monday that prolonged interruptions could push up transportation and logistics costs, which in turn could fuel higher inflation expectations and weaken the Fed's flexibility to pause tightening policy even in the face of weak economic data.

"This dynamic creates policy tension: persistent energy prices may force the Fed to maintain a restrictive stance, while weak economic data caused by high energy costs may justify the need for patience."

As the Federal Reserve prepares to announce its latest interest rate decision on Wednesday, the market is generally expected to raise interest rates by 25 basis points under benchmark conditions, with the target interest rate range adjusted to 3.75%-4%.

Bitcoin technical aspects: The 50-week EMA is back in focus

In addition to macro drivers, traders continue to track Bitcoin technical indicators. According to the TradingView chart quoted by Cointelegraph, BTC/USD rebounded above the level of about $77,430 on Monday after Sunday's close below its 50-week EMA.

This recovery is significant because the 50-week EMA is often seen by market participants as a trend filter for long-term momentum. Cointelegraph previously pointed out that the 50-week EMA plays a key role as the main support target for bulls trying to expand the broader bull market recovery pattern. From a practical perspective, regaining this level can reduce the risk of BTC getting stuck in the bearish or correction phase associated with weekly charts.

However, this rebound also highlighted the market's continued sensitivity to upcoming policy updates. Given that interest rate hikes have been largely priced, traders are likely to pay closer attention to the Fed's rhetoric and its impact on the future path-especially if energy costs continue to complicate the balance between inflation and growth.

Why the Fed's "words" may be more important than the actions themselves

QCP Capital believes that the market has actually digested the 0.25% interest rate hike expectations, which means that price fluctuations surrounding the resolution itself may be less than usual. Within this framework, Bitcoin's near-term direction may depend more on how officials define the action and their hints about future tightening policies.

QCP also pointed out the important background for last week's release of the Consumer Price Index (CPI). It describes the market's overall response to CPI as flat, implying that the key variable now may be the transmission of information rather than the stark fact of whether interest rates have increased.

In other words, even if the probability of a rate hike in the Fed's pricing model is close to more than 90%, markets may still reprice risky assets if the Fed hints that energy-driven inflation risks are still ongoing, or conversely, if it releases confidence that inflation is cooling fast enough to slow the pace of tightening.

For traders and long-term holders, the next signals to watch are clear: how oil prices will react if the Iran conflict narrative continues to soften; and whether the Fed's language will confirm a path consistent with expectations already embedded in market pricing. If BTC stays above the 50-week EMA after Wednesday, it will strengthen buyers 'reasons to defend the trend; if that level is lost again, the market may view the rally as a correction.