Bitcoin Rebound Hinges on Hawkish Fed Decision and Thursday's Economic Data
Bitcoin rebounded above $65,000 on Monday as tensions between the US and Iran eased, but this relief rally may be short-lived.
The largest cryptocurrency rose about 1% to $65,155, while Ethereum gained 4% to around $1,964, its highest level since early June.
However, the surge in oil prices last week has altered expectations for US interest rates, leaving Wednesday's Federal Reserve decision capable of extending Bitcoin's rebound or putting renewed pressure on it.
The Fed funds futures on Monday priced roughly a one-in-three chance of a 25-basis-point increase when policymakers conclude their two-day meeting Wednesday.
About two-thirds of the market still expects the Fed to keep its target range unchanged at 3.50% to 3.75%, but the prospect of an immediate increase has become difficult for risk markets to ignore, particularly after higher energy prices pushed inflation concerns and Treasury yields back into focus.