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Bitcoin extends gains as ETF inflows and hopes for easing US-Iran tensions lift sentiment
Bitcoin extended its gains on Wednesday, trading above the $64,316 level and moving closer to a key resistance zone that could pave the way for further upside if decisively broken.
The world's largest cryptocurrency found support as optimism grew over diplomatic progress between the United States and Iran, raising expectations for the reopening of the Strait of Hormuz. That prospect has eased geopolitical concerns and energy market pressures, improving investor appetite for higher-risk assets.
Easing geopolitical tensions boost risk appetite
US Treasury Secretary Scott Bessent said Washington could reach an agreement with Iran to reopen the Strait of Hormuz as early as Tuesday or Wednesday. Meanwhile, Axios reported that the United States, Iran, and Oman are nearing a temporary 60-day agreement to regulate shipping through the strategic waterway, with a potential announcement expected on Wednesday.
At the same time, OPEC+ agreed to increase oil production starting in September, helping push crude prices to their lowest levels since June 13. The decline in oil prices has strengthened expectations of easing inflationary pressures and reduced the perceived need for further tightening by the Federal Reserve.
According to CME FedWatch data, the probability of a US interest rate hike in September fell to 58.9%, down from 64.7% a day earlier. The shift weighed on the US dollar while providing additional support for risk-sensitive assets, including Bitcoin.
Institutional inflows continue to support prices
Institutional demand also remained a positive driver for the cryptocurrency market. Data from SoSoValue showed that US spot Bitcoin ETFs recorded net inflows of $211.49 million on Tuesday, following inflows of $170.09 million in the previous session.
Market participants believe that sustained or accelerating ETF inflows over the coming days could reinforce Bitcoin's recovery and increase the likelihood of the cryptocurrency testing higher resistance levels.
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