Cryptocurrency Markets Surge as Ceasefire Boosts Investor Confidence, Eyes on Powell

Cryptocurrency prices experienced a significant upswing on Wednesday, driven by the relief felt across global markets following the acceptance of a U.S.-brokered ceasefire between Iran and Israel. As a result, traders have shifted their focus back to risk assets, with the price of bitcoin rising to nearly $107,000, representing a 1.7% increase over the past 24 hours. The broader CoinDesk 20 index also saw a 1% gain. However, this surge may be short-lived due to growing doubts about the sustainability of the ceasefire. According to Susannah Streeter, head of money markets at Hargreaves Lansdown, 'optimism about the fragile ceasefire has led to a market rally, but doubts are emerging, and concerns about the truce holding are on the rise.' A leaked U.S. Intelligence report questioning the effectiveness of U.S. strikes on Tehran's nuclear capabilities has further fueled these worries. Meanwhile, Federal Reserve Chair Jerome Powell's statement that the central bank will adopt a patient approach before implementing interest-rate cuts has also contributed to the rally. Powell emphasized that inflation remains elevated and may face additional pressure from tariffs in the coming months. Bitunix analysts noted that Powell's 'wait-and-see' approach has introduced short-term uncertainty in rate policy, providing markets with flexibility and supporting risk assets, but also highlighting the need for investors to closely monitor upcoming tariff developments and inflation data. U.S. consumer confidence has softened, resulting in a six-week low of 3.78% for two-year Treasury yields and increasing the perceived chances of a rate cut in July to approximately 20%, according to the CME's FedWatch tool. This represents an increase from 13% a week ago, with traders on Polymarket weighing an 18% chance of a cut. Powell is set to testify before a Senate committee later today, and traders will be closely watching his testimony, particularly given President Donald Trump's continued pressure on the Fed to lower interest rates. In the cryptocurrency derivatives market, traders have adopted a neutral approach ahead of the June 27 expiry, with some selling straddles and short puts near $105,000 and $100,000, indicating an expectation of limited price action. However, the purchase of call options targeting $108,000 and $112,000 for July and September suggests a modest bullish inclination.