Bitcoin Surges 5% to $105,000 Despite Geopolitical Tensions

Bitcoin has shown remarkable resilience, surging past $105,000 despite ongoing geopolitical tensions between Iran and Israel. The cryptocurrency experienced a brief dip following Israel's targeting of Iranian nuclear sites but quickly rebounded, demonstrating its ability to recover from geopolitical shocks. This resilience is attributed to investors seeking Bitcoin as a safe haven against uncertainties. The Crypto Fear and Greed Index currently stands at 61, indicating a cautiously positive sentiment among market participants.

The Federal Open Market Committee (FOMC) meeting this week is a key focus for market observers, as the decision on interest rates could significantly impact Bitcoin's price. The upcoming FOMC interest rate decision, expected on Tuesday and Wednesday, continues to capture market attention. The CME Group’s FedWatch Tool projects a 96.7% probability of the Fed maintaining the current interest rate between 4.25% and 4.50%.

In recent developments, U.S. spot Bitcoin Exchange-Traded Funds (ETFs) reported $5.23 billion in net monthly inflows, reflecting levels from Donald Trump’s presidency and offering bullish market signals. Breaking the $106,406 resistance signifies persistent bullish momentum, with the next notable target being a record high. Ethereum (ETH), a major altcoin, saw a 1.48% rise recently, priced at $2,569. Analysts suggest ETH is strengthening its hold in the institutional sector, potentially spurred by phenomena like DeFi Summer. Bitcoin maintains a 65% dominance in the market, while Ethereum's recent gains indicate a growing institutional interest in the cryptocurrency.

Despite the geopolitical headwinds, Bitcoin has managed to hold firm above its previous all-time high. The cryptocurrency dipped below $105,000 overnight before steadying as traders weighed the geopolitical fallout and tariff uncertainty. This stability suggests that markets are increasingly viewing Bitcoin as a safe-haven asset, capable of weathering geopolitical storms. The market sentiment remains cautious, with investors on edge as the Israel-Iran conflict enters its fourth day. However, there are signs that the market believes a peace deal may be on the horizon. The equities market has turned green, followed by a rise in oil prices, while safer assets like gold have traded down. Risky assets like Bitcoin have also recovered slightly, indicating a shift in market sentiment towards risk tolerance.

Analysts have noted that if the market were truly concerned about a long-term conflict, oil prices would have already crossed above $100 per barrel. The current market dynamics suggest that investors are optimistic about a resolution to the conflict, which could further bolster Bitcoin's price. The Relative Strength Index (RSI) momentum indicator on the daily chart is hovering around its neutral level of 50, indicating indecision among traders. The Moving Average Convergence Divergence (MACD) indicator on the daily chart displayed a bearish crossover on Thursday, showing a sell signal and indicating a downward trend. However, if Bitcoin recovers and closes above its Fair Value Gap (FVG) level at $108,064, it could extend the recovery toward retesting its May 22 all-time high of $111,980.

In summary, Bitcoin's ability to maintain its position above $105,000 despite geopolitical tensions highlights its growing acceptance as a safe-haven asset. Institutional demand remains robust, with significant inflows into spot Bitcoin ETFs and major investments by firms. While market sentiment is cautious, there are signs of optimism about a potential resolution to the Israel-Iran conflict, which could further support Bitcoin's price. The upcoming FOMC meeting and any announcements regarding ETFs or stablecoins from the U.S. SEC and Treasury are likely to further influence market sentiments and investment flows.