BTC price prediction: Ceasefire in Iraq, institutional demand, and The Federal Reserve (FED) encryption-friendly stance help BTC to challenge ATH

Gate News, following a 4.3% rise the day before, the price of Bitcoin (BTC) stabilized above $105,000 on Tuesday as of writing (latest market data shows BTC at $106,405, up 1.0% in the past 24 hours). This rebound comes as global risk sentiment improves following the ceasefire between Iran and Israel, and The Federal Reserve (FED) announced on Monday a more accommodative stance on cryptocurrency-related banking activities. In addition to this risk appetite, institutional demand remains strong, with increased BTC holdings in corporate reserves and inflows of new ETFs from exchanges, indicating further upward potential for BTC prices.

Geopolitical tensions eased, risk appetite warmed up On Monday, the price of BTC rebounded significantly, closing up by 4.3%. Earlier, there were reports that Donald Trump announced a "comprehensive" ceasefire between Israel and Iran, effectively pausing the 12-day war.

Later on Tuesday, Donald Trump's Truth Social account posted a message saying, "The ceasefire is now in effect," and called on both countries not to violate the ceasefire agreement, exacerbating global market risk aversion.

(Source: Truth Social)

Risk appetite rebound and expectations of a dovish stance by The Federal Reserve (FED) have also supported the rise in the Crypto Assets market, further pushing down the yield of US two-year Treasury bonds to below 4%.

Traders are currently waiting for U.S. economic data, including the release of the World Economic Forum Consumer Confidence Index. This data, along with speeches by officials from The Federal Reserve (FED), will collectively influence the direction of the dollar and overall market sentiment.

The market is mainly focused on the testimony of Jerome Powell, Chairman of The Federal Reserve (FED), at the House Financial Services Committee at 14:00 Greenwich Mean Time, which may provide clues to the future interest rate cut path and impact risk assets such as BTC.

Supportive regulatory policies boost the price of BTC On Monday, the Federal Reserve announced that "reputational risk" will no longer be part of its bank supervision review.

This news adds momentum to the continued recovery of BTC, as the previous 'reputation risk' known as 'Operation Choke Point 2.0' had prevented banks from providing custody services for encryption assets and from providing financial services to digital asset companies.

This policy shift, along with The Federal Reserve (FED)'s more relaxed stance on encryption-related banking operations, may promote a more widespread adoption and acceptance of digital assets. However, The Federal Reserve (FED) still expects banks to maintain prudent risk management to ensure safety and soundness, and to comply with laws and regulations.

Senator Cynthia Lummis(Cynthia Lummis) stated on her X account: "This is a victory, but there is still more work to be done."

(Source: X)

Institutional demand for BTC remains strong This week, institutional demand for BTC started off well. Strategy (formerly known as MicroStrategy) announced on Monday that it had increased its holdings by 245 BTC. The company now holds 592,345 BTC.

Japanese investment firm Metaplanet has also increased its holdings by 1,111 BTC, bringing its total holdings to 11,111 BTC. Following Strategy and Metaplanet, The Blockchain Group has also confirmed an increase in holdings of 75 BTC, bringing its total holdings to 1,728 BTC.

According to HODL15Capital statistics, the BTC spot ETF bought a total of 5,584 BTC on Tuesday, while the actual mining volume was only 450 coins. The BTC spot ETF has been flowing in for 11 consecutive days, with an additional $3.3 billion in 11 days.

BTC Price Prediction: BTC Closing Breaks Above the 50-Day Moving Average BTC price fell to a low of $98,200 last Sunday, rebounded significantly by 4.3% on Monday, broke through the 50-day moving average, closing above $105,300. At the time of writing, the price is hovering around $106,405.

If BTC continues to Rebound, its pump momentum may continue to the historical high of $111,980 on May 22.

On the daily chart, the Relative Strength Index RSI is hovering around the neutral level of 50, indicating that the pump momentum is weakening. To maintain the pump momentum, RSI should continue to break through the neutral level. The Moving Average Convergence Divergence MACD suggests a pump cross (MACD line is close to crossing the signal line), if completed, a buy signal will be generated.

(Source: Tradingview)

However, if BTC faces a pullback and closes below the 50-day EMA of $103,188, it may continue to decline, retesting its low of $98,200 last Sunday.

(Source: NewsBTC)