Bitcoin Bulls Take on Fed Hike Fears as Options Market Flips Bullish
Bitcoin has staged a late summer rebound past $70,000 after languishing at two-year lows of around $60,000. The rally marks a sharp turnaround for the largest cryptocurrency, which had slumped roughly 50% from its October 2025 peak of above $126,000.
The options market has flipped bullish for the first time in 12 months, with many traders betting bitcoin could hit $80,000 or higher by December. This optimism seems misguided given the current headwinds, including tensions in the Middle East and elevated inflation expectations that may lead to a Federal Reserve rate hike.
Despite these challenges, analysts believe bitcoin has reached its lowest ebb and can sustain momentum. 'BTC was in oversold territory for some time,' said Matthew Dibb, chief operating officer of Stack Funds. 'Short-term traders are looking towards inflation figures and rate rises as short term threats.'