Bitcoin jumped to a two-week high near $67,000 on Tuesday, lifted by easing macro fears after an Iran ceasefire and a renewed focus on the so-called 'Warsh week' narrative. The move comes as traders brace for a pivotal Federal Reserve meeting that is unlikely to deliver a rate cut.
Ceasefire fuels risk-on mood
The rally got its spark from news of a ceasefire between Iran and its regional adversaries, which eased fears of a broader conflict that had weighed on risk assets for weeks. Crypto markets, often sensitive to geopolitical shocks, quickly repriced as the threat of supply disruptions and safe-haven demand for the dollar receded. Bitcoin climbed from around $64,000 to touch $67,000 in early European trading before settling near that level.
'Warsh week' returns to the spotlight
Market participants also pointed to the 'Warsh week' narrative as a tailwind. The term, which references a period when former Fed governor Kevin Warsh was considered for the central bank's top job, has been cited by some traders as a bullish factor in recent days. While the exact catalyst remains murky, the phrase has gained traction on social media and in trading chat rooms, adding a layer of speculative momentum to the move.
Fed rate cut odds remain low
Despite the upbeat tone, the macro backdrop is far from dovish. The Federal Reserve enters its blackout period this week ahead of the June 17-18 FOMC meeting, and rate cut odds are virtually zero. Strong employment data and sticky inflation have kept the central bank on hold, and Chair Powell is expected to reiterate a patient stance. That leaves crypto traders betting on a 'higher for longer' environment, which historically has been a headwind for speculative assets.
All eyes now turn to the Fed's decision next week. If the central bank holds steady as expected, the focus will shift to the dot plot and any hints about the timing of the first cut. For now, the ceasefire and the Warsh week buzz have given Bitcoin a short-term lift, but the real test will come when the FOMC statement lands.
