Bitcoin pared losses on Thursday after US President Donald Trump announced he would extend the waiting period for attacks on Iranian energy facilities. The cryptocurrency market showed some recovery with this statement during the day.
Trump’s statement and market effects
In his post on his social media account, Donald Trump stated that attacks on the energy infrastructure of Iran were postponed for 10 days at the request of the Iranian government. Stating that diplomatic negotiations are continuing, Trump noted that this process is progressing positively.
Following the announcement, Bitcoin recovered from its lowest level during the day and rose by approximately 1 percent to over $69,000. In addition to Bitcoin, other major crypto assets such as Ether, XRP and Solana also saw a similar recovery in the middle of the session. However, these assets still continued to lose between 3 and 5 percent in value in the last 24 hours.
The fluctuations in the cryptocurrency markets on Thursday generally ran parallel to the tensions in global financial markets. While the Nasdaq index, which is dominated by technology companies, fell by 2.4 percent during the day, it closed down approximately 10 percent since the highest level since the beginning of the year.
Macroeconomic developments and financial markets
The rise in oil prices, accelerated by the Ukraine-Russia tension, has been among the prominent headlines in the markets in recent days. However, the sales wave observed in the bond markets of Western countries has begun to become more noticeable for investors.
While the US 10-year bond interest rate was below 4 percent a few weeks ago, it rose to 4.43 percent on Thursday and then decreased slightly to 4.41 percent. With this increase, expectations that the US Federal Reserve (Fed) may increase interest rates in the near future have also increased.
While there is a similar increase in bond yields in Western Europe, expectations about the monetary policies of central banks are being reshaped in the markets. While investors decreased their hopes for an interest rate cut, the possibility of an interest rate increase began to be talked about more.
This recovery in cryptocurrencies in a short time reveals that the environment of uncertainty in global markets continues to exist. In particular, geopolitical developments and changes in interest rate expectations continue to have an impact on market sentiment.
