Bitcoin recovers toward $74,000 as ceasefire reports lift risk sentiment

Bitcoin rebounds after geopolitical-driven selloff

Bitcoin, the world’s largest cryptocurrency, rose 0.8% to $73,736.6 by 02:17 ET (06:17 GMT) on Friday. The move followed a decline to near $72,500 in the prior session, when the token came under pressure after fresh U.S. military strikes on Iranian-linked targets prompted a flight toward traditional safe havens.

Despite the intraday recovery, bitcoin remained on track for a 4% weekly loss and a 4% monthly decline. It also continued to trade well below its May peak above $82,000. Data from market trackers indicated that institutional sentiment remained cautious, with outflows from spot bitcoin ETFs exceeding $2.5 billion over the past two weeks amid heightened geopolitical uncertainty.

Investor sentiment improved after reports that Washington and Tehran had agreed in principle to extend a 60-day ceasefire and ease restrictions on shipping through the Strait of Hormuz. The proposal still awaits final approval from U.S. President Donald Trump. The prospect of reduced tensions in the Middle East helped lift global equities and pressured oil prices lower, encouraging rotation back into higher-risk assets, including cryptocurrencies.

Fed inflation gauge reinforces higher-for-longer rates

Market participants were also assessing U.S. inflation data released on Thursday. The personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, rose 3.8% year-on-year in April, its fastest pace in roughly three years. The reading reinforced expectations that the Fed could keep interest rates elevated for longer.

Higher-for-longer rate expectations have weighed on cryptocurrencies this year by curbing demand for speculative assets. Friday’s rebound in bitcoin occurred against this backdrop of tighter financial conditions and ongoing ETF outflows.

Altcoins see modest recovery

Most major altcoins recorded modest gains on Friday after sharp declines in the previous session. Ethereum, the second-largest cryptocurrency by market capitalization, rose 1.6% to $2,014.92. XRP, the third-largest, climbed 2.3% to $1.32.

Solana and Polygon each advanced 1%, while Cardano gained 2.6%. Among meme tokens, Dogecoin rose 1.7%, reflecting a broader but measured rebound across the crypto complex in line with improving risk sentiment.

FAQ

What caused bitcoin to rebound on Friday?
Bitcoin rebounded as reports that the U.S. and Iran were close to extending a ceasefire and easing shipping restrictions in the Strait of Hormuz improved risk sentiment, supporting demand for higher-risk assets.

How has bitcoin performed over the week and month?
Bitcoin is heading for a 4% weekly loss and a 4% monthly decline, remaining well below its May peak above $82,000 despite Friday’s recovery.

What role did U.S. inflation data play in crypto markets?
The PCE price index rose 3.8% year-on-year in April, strengthening expectations that the Federal Reserve may keep interest rates elevated for longer, which has generally weighed on cryptocurrencies by reducing demand for speculative assets.

How did altcoins move alongside bitcoin?
Altcoins posted modest gains, with Ethereum up 1.6%, XRP up 2.3%, Solana and Polygon each up 1%, Cardano up 2.6%, and Dogecoin up 1.7%, following earlier sharp declines.