Bitcoin Surges 6% to $106,000 as Geopolitical Tensions Ease and Fed Rate Cut Hopes Rise

Bitcoin's price surge above $106,000 this week has reignited bullish sentiment across the market, with analysts suggesting that multiple macroeconomic factors are aligning for a potential rally to a new all-time high. The recent geopolitical tensions and a significant regulatory shift in the United States are setting the stage for Bitcoin’s next significant move.

Over the weekend, Bitcoin's price briefly dipped, triggering over $200 million in leveraged long liquidations. However, this dip was short-lived as the flagship cryptocurrency rebounded swiftly above $100,000 following the announcement of a total ceasefire between Israel and Iran by the US President. This sudden de-escalation helped ease global market anxiety, pushing Bitcoin past $106,000 and oil prices sharply down from $77 to under $70.

Simultaneously, optimism is building that the Federal Reserve could begin cutting interest rates sooner than expected. According to the data by CME Group’s FedWatch Tool, the odds of a rate cut have increased to 18.6% by July 30 during the scheduled FOMC meeting. The report reveals that 81.4% of market participants believe the Federal Reserve to keep rates unchanged at their current level. However, FedWatch’s data indicates growing expectations for a rate cut by the September FOMC meeting, with 79% betting on a reduction and only 21.3% anticipating no change.

Lower interest rates generally benefit risk assets like Bitcoin by increasing liquidity and boosting investor sentiment. With geopolitical tensions easing and a possibly looser monetary policy on the horizon, Bitcoin could gain further momentum, potentially climbing to $110,000. Supporting this bullish forecast, crypto analyst Justin Bennett suggests that Bitcoin is gearing up for a rally toward a new all-time high of $110,000 following its recent reclaim of the key $103,500 level. Although a retracement to around $102,500 remains possible, Bennett believes that once BTC cleans up support around $103,400, formed during Monday’s expansion, the next move could be parabolic.

Beyond anticipated rate cuts and ceasefire announcements, the Federal Reserve recently made a landmark policy shift that could have profound long-term implications for Bitcoin and the broader crypto market. By removing “reputational risk” as a factor in evaluating crypto firms’ access to bank servicing, the Federal Reserve is effectively ending a key pillar of Operation Checkpoint 2.0—a campaign that restricted over 30 crypto and fintech companies from traditional financial infrastructure.

This recent change clears the way for greater institutional involvement in crypto. The Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation have also followed suit, green-lighting crypto activities for banks and allowing them to participate in the digital assets market without prior approval. Together, these moves mark a regulatory pivot that not only legitimizes the crypto industry but could also accelerate demand and capital inflows into Bitcoin, potentially boosting its already significant valuation.