Bitcoin's Rally Fades Amid Geopolitical Tensions and Rate Hikes
Bitcoin's multi-week rally has lost momentum as market participants assess fresh macroeconomic risks. The price of BTC has risen by 28% since August 19, but traders are now cautious due to geopolitical uncertainty and expectations for another Federal Reserve rate increase.
The recent rejection of Iran's proposal to reopen the Strait of Hormuz by U.S. President Trump has added to market uncertainty. This move comes as markets continue to absorb the effects of the Federal Reserve's rate increases, with some expecting another hike in October.
Higher interest rates can tighten financial conditions and weigh on risk-sensitive assets like Bitcoin. However, despite the slowdown, BTC remains poised for its strongest quarterly performance since the fourth quarter of 2024.