Bitcoin jumps above $65,000 levels

The cryptocurrency last traded 1.5% higher at $65,405.4, recovering from last week’s volatility as investors returned to risk assets

Bitcoin climbed above $65,000 levels on Monday, as a halt in Iran-U.S. attacks over the weekend sent oil prices sharply lower and reduced immediate inflation concerns.

The cryptocurrency last traded 1.5% higher at $65,405.4 by 05:29 GMT, recovering from last week’s volatility as investors returned to risk assets.

Bitcoin closed the last week largely unchanged amid choppy trading.

Market sentiment improved after Iran said it would pause retaliatory attacks if Washington refrained from further military action, while the U.S. also halted its campaign, easing fears of a broader regional war.

The de-escalation triggered a sharp retreat in oil prices, with Brent crude dropping more than 5%, helping to ease concerns that higher energy costs could reignite inflation and force central banks to keep monetary policy tighter for longer.

The softer inflation outlook also weighed on the U.S. dollar, making dollar-denominated assets such as cryptocurrencies more attractive to overseas investors.

Investor attention has now shifted to the U.S. central bank’s policy meeting later this week. The central bank is widely expected to leave interest rates unchanged on Wednesday, although traders will closely scrutinize Chair Kevin Warsh’s comments for clues on the policy outlook through the remainder of the year.

Markets currently assign roughly a one-third probability of a rate increase at the meeting.

Higher interest rates typically reduce the appeal of speculative assets such as cryptocurrencies by increasing returns on safer investments and tightening financial conditions.

Broader financial markets also reflected improving risk appetite. U.S. stock futures advanced, and gold prices rose alongside cryptocurrencies.

Bitcoin has increasingly traded in line with technology stocks and other risk assets this year.