Bitcoin reclaims $65K; Fed decision Wednesday may reverse

Bitcoin rose roughly 1% to about $65,155 on Monday after U.S. forces paused strikes and Tehran indicated it would suspend attacks while the United States did the same. Ether gained about 4% to near $1,964. Brent crude fell about 6.5% to roughly $90.45 a barrel.

The pause in hostilities reduced the geopolitical premium on energy and other risk assets, allowing the largest cryptocurrency to recover levels lost during last week’s sell-off.

Market pricing ahead of the Federal Reserve’s two-day meeting shows a roughly one-in-three probability of a 25-basis-point rate increase when policymakers conclude on Wednesday, up from about 16% a week earlier. About two-thirds of the market still anticipates the Fed will keep the target range at 3.50%–3.75%.

June consumer price data showed monthly CPI fell 0.4%, the largest monthly drop since April 2020. Annual headline inflation slowed to 3.5% from 4.2% in May. Core inflation eased to 2.6% from 2.9%, with core prices unchanged for the month. Energy prices were a major factor: the energy index dropped 5.7% in June and gasoline prices fell sharply.

The later jump in oil pushed traders to reassess whether the June disinflation would persist. At the Fed’s June meeting, officials cited supply shocks, including energy, as contributing to elevated inflation. The median projection from officials showed a federal funds rate near 3.8% at the end of 2026, and nine of 18 officials projected year-end rates above the midpoint of the current target range.

Fed communications and the chair’s press conference are scheduled to follow the policy decision. Markets have priced a high probability of further tightening by September, and market participants are watching whether officials treat the recent energy-driven price moves as temporary or as a reason to raise rates again.

Options markets reflected reduced near-term defensive positioning. The open-interest put-to-call ratio for Bitcoin fell to about 0.52 from roughly 0.76 in late June. One-week at-the-money implied volatility was near 34.3%, compared with about 40.8% for six-month contracts. Short-dated 25-delta skew dropped to near 4% while three- to six-month skew readings remained around 11%–12%.

Economic releases scheduled less than 24 hours after the Fed decision include the Commerce Department’s first estimate of second-quarter GDP and June personal income and spending figures, which contain the personal consumption expenditures inflation measures favored by the Fed. Those readings will provide further data on growth and inflation in the period since the June CPI report.

The direction of rates, oil prices and any renewed geopolitical escalation are key variables for markets in the coming days. The Fed decision on Wednesday and the economic data on Thursday are both being monitored for signals about the likely path of monetary policy and market conditions.