Bitcoin Approaches $107K Amid Ceasefire Relief and Fed Focus

Bitcoin surged toward $107,000 on Wednesday, capitalizing on a U.S.-brokered ceasefire between Iran and Israel that eased fears of an oil supply disruption and revitalized global risk assets. According to Francisco Rodrigues, BTC climbed to $106,693.69 as of the latest data, marking a 1.36% increase over the past 24 hours, while the broader market index gained 1%. This rally stemmed from traders reallocating capital into cryptocurrencies amid reduced geopolitical tensions, with BTC's price peaking at $107,653.91 during the session. However, Susannah Streeter, head of money markets at Hargreaves Lansdown, warned that optimism could be fleeting due to lingering doubts about the truce's stability, fueled by intelligence reports questioning U.S. strikes' effectiveness on Iran's nuclear capabilities.

Fed Policy and Macroeconomic Influences

Federal Reserve Chair Jerome Powell's testimony on Tuesday added momentum to the crypto surge, as he advocated for patience on interest rate cuts amid persistent inflation concerns and potential tariff impacts. Bitunix analysts highlighted that Powell's "wait-and-see" approach injects short-term uncertainty but ultimately supports risk assets, advising traders to watch upcoming inflation data. Concurrently, U.S. consumer confidence softened, pulling two-year Treasury yields to a six-week low of 3.78% and boosting the perceived chance of a July rate cut to about 20%, up from 13% a week earlier, as tracked by the CME FedWatch tool. This backdrop, combined with Powell's upcoming Senate testimony, positions BTC near critical resistance at $107,000, offering potential breakout opportunities if dovish signals emerge.

Derivatives and Trading Dynamics

Derivatives markets reflect cautious optimism, with Jake O, an OTC trader at Wintermute, noting neutral positioning around the June 27 expiry. Traders sold straddles and short puts near $105,000 and $100,000, indicating expectations of tight price action in the $100,000-$105,000 range. Yet, call option buying targeting $108,000 and $112,000 for July and September points to a modest bullish bias. On-chain metrics show BTC's annualized three-month futures basis on offshore exchanges at 5%, below May highs above 7%, while perpetual funding rates on Binance stood at 0.0048% (5.26% annualized), suggesting moderate bullish sentiment. ETH traded at $2,421.55, down 1.2%, with its ratio to BTC falling to 0.02269, highlighting ETH's relative underperformance despite a 0.19% 24-hour gain.

ETF Flows and Broader Market Correlations

Spot BTC ETFs recorded robust inflows, with daily net flows of $588.6 million and cumulative flows reaching $47.58 billion, holding approximately 1.23 million BTC, according to Farside Investors. Spot ETH ETFs followed with $71.3 million in inflows. Crypto equities like Coinbase (COIN) closed up 12.1% at $344.82, pre-market trading indicated continued strength, underscoring institutional confidence. Technical analysis reveals the XRP/BTC pair on Binance in a falling wedge pattern, signaling potential bullish reversal upon breakout, while SOL surged 3.21% to $146.69 against USDT. Broader market indicators, such as the S&P 500 closing up 1.11% at 6,092.18 and gold futures at $3,336.20, reinforce crypto's correlation with traditional risk assets, providing cross-market trading cues.

Upcoming events, including Powell's Senate testimony and key data like May durable goods orders, could drive volatility. Traders should monitor support at $105,000 for BTC and resistance at $107,000, with geopolitical risks and Fed guidance pivotal for short-term strategies. The decline in high-risk DeFi loans by $242 million over two weeks indicates healthier market conditions, reducing liquidation risks and supporting a bullish outlook for altcoins like SOL and ADA, which gained 3.21% and 1.42% respectively.