Bitcoin rebounds as softer U.S. inflation supports recovery despite geopolitical risks

Bitcoin rebounds as softer U.S. inflation supports recovery despite geopolitical risks
Bitcoin

​Bitcoin has recovered toward the $65,000 area after weaker than expected U.S. inflation data reduced expectations for additional Federal Reserve tightening. Lower Treasury yields and a weaker U.S. dollar encouraged renewed demand for risk assets, allowing Bitcoin to extend its rebound from last week's lows. 

While macroeconomic conditions have become more supportive, investors remain cautious ahead of the upcoming Federal Reserve meeting and additional economic releases that could reshape interest rate expectations.

Middle East tensions continue to limit upside

Geopolitical developments remain an important source of volatility. Renewed tensions involving Iran and shipping through the Strait of Hormuz have pushed oil prices higher and revived concerns that energy-driven inflation could remain elevated. A sustained increase in crude prices could complicate the Federal Reserve's policy outlook and reduce appetite for speculative assets, even after the latest encouraging inflation figures.

Technical picture continues to improve

The chart shows Bitcoin holding above its short, medium, and long-term moving averages after a strong rebound from the recent correction. Price has recovered toward the upper end of its recent trading range near $65,000, suggesting that buyers have regained short-term control. Even so, Bitcoin has not yet delivered a decisive breakout above nearby resistance, meaning the current advance still requires confirmation before a broader bullish trend can be established.

Institutional flows remain mixed

Institutional participation has improved compared with late June, but conviction remains inconsistent. Recent ETF inflows have helped stabilize sentiment after an extended period of withdrawals, although daily flow data continue to fluctuate sharply as investors react to macroeconomic headlines and geopolitical developments. Until ETF demand becomes more consistent and macro uncertainty begins to ease, Bitcoin, as written in Bitcoin stabilizes as geopolitical risks offset improving institutional demand, is likely to remain highly sensitive to changes in interest rate expectations and global risk sentiment.

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