Crypto tested its recent lows but held key technical support, including its 200-day moving average, as selling pressure and ETF outflows eased. The weekend US-Iran resolution then set off a broad risk-on rally that lifted bitcoin to nearly $67,000 and ether to about $1,850 before both gave back part of the move, per CoinDesk data.
Volatility came down with it. Bitcoin's realized volatility, a measure of how much the price has actually moved, ran below 1% on most days, the exception being a sharp one-day jump on the geopolitical news, and implied volatility, the market's expectation of future swings, also fell. The decline points to a normalization of risk perceptions even with the conflict only just resolved.
The week's focus is the Federal Reserve. The June 16-17 FOMC meeting is the first under new chair Kevin Warsh, with markets pricing no cuts and a path of possible hikes running into 2027.
The Bank of Japan raised its policy rate by 25 basis points to 1% on Tuesday, its highest level since 1995, as it continues to combat rising inflation.
Historically, BOJ's tightening cycles have often coincided with or preceded U.S. recessions, including episodes in the 1970s, 1980s, 1990s, 2000s, and during the Global Financial Crisis. The only notable exception was the post-covid normalization period, according to Andre Dragosch, European Head of Research at Bitwise.
Despite the rate hike, bitcoin climbed above $66,000 after the announcement. Markets focused on the BOJ's decision to pause bond tapering, a move that could help limit upward pressure on long-term yields and support broader financial conditions, including risk assets and crypto.
SpaceX (SPCX) surged 20% on Monday, closing with a market valuation of approximately $2.5 trillion. The stock is up a further 9% in pre-market trading on Tuesday at $210 per share, lifting its valuation above $2.7 trillion and pushing its market capitalization past Amazon's $2.6 trillion.
The stock has now gained 54% since its IPO debut at $135 on Friday.
Broader markets are relatively subdued. Bitcoin is trading around $65,000, the Invesco QQQ ETF is at $744, and gold is holding near $3,340 per ounce, all slightly higher on the day.
Oil continues to weaken, with Brent crude falling to $78 per barrel, down 3% over the past 24 hours.
Goldman Sachs has lowered its oil price forecasts after President Donald Trump announced that an Iran deal, to be signed this Friday, will pave the way for the Strait of Hormuz to reopen to oil tanker traffic.
The bank now expects Brent crude to average $80 per barrel in the fourth quarter of this year, down from its previous projection of $90. Its 2027 average price forecast was also revised lower to $75 from $80. West Texas Intermediate (WTI) crude is now projected to average $75 in the fourth quarter and $70 in 2027.
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