Institutional demand remains steady as Middle East tensions ease and interest rate cut bets rise.
Bitcoin (BTC) rebounded to $106,000 on Monday after briefly dropping below $98,500 on Sunday — its lowest level in 45 days. The recovery came as market sentiment improved following U.S. President Donald Trump’s announcement of a “total ceasefire” between Israel and Iran. Meanwhile, traders are increasingly pricing in the likelihood of U.S. Federal Reserve interest rate cuts in the months ahead.
Institutional Interest Remains Strong Despite Volatility
Despite the recent price swings, Bitcoin’s derivatives market remained relatively stable. The drop below $100,000 triggered $193 million in long liquidations, or approximately 0.3% of total open interest, but overall futures positions held steady at $68 billion, unchanged from Saturday.
Bitcoin’s 4.4% price decline over 12 hours is not unusual by historical standards, with similar moves occurring three times over the past month. However, analysts caution that lingering geopolitical risk — particularly in the Middle East — could impact broader market sentiment.
Mining Hashrate Falls 8% — Conflict or Weather?
Bitcoin’s hashrate fell by 8% between Sunday and Thursday, declining from 943.6 million TH/s to 865.1 million TH/s. This sparked speculation about possible disruptions to mining operations in Iran, where unofficial estimates suggest miners may be drawing up to 2 gigawatts of electricity — though these figures are unconfirmed.
Still, industry experts like Daniel Batten emphasized that similar hashrate drops are often tied to temporary energy outages. For example, in April, extreme weather in Texas and Oklahoma led to a 27% decline in hashrate, as miners shut down operations during storms to stabilize the energy grid.
“Where is all the hashrate coming from?”
Iran. ~2 GIGAWATTS ⚡️⚡️ (and most of it’s illegal)@AsILayHodling dropped a BANGER feature story in @blockspacepod this morning.
Wild takeaways:
→ Iranians are actively skirting sanctions with Bitcoin mining
→ There’s over 3K flared… pic.twitter.com/xKEPxAuw58— cbspears ◉ (@cbspears) May 14, 2025
Middle East Ceasefire Triggers Broader Market Relief
Oil prices pulled back on Monday, falling from a weekend peak of $77. This was accompanied by a 1% rally in the S&P 500, as investors grew more confident in the potential for monetary easing.
According to the CME FedWatch Tool, the probability that the Fed will hold interest rates at 4.25% through November fell from 17.1% to just 8.4% over the past week. At the same time, the chance of rates dropping to 3.75% or lower rose to 53%, up from 38%.
Outlook: $110K in Sight — But Not Without Risks
While some analysts are hopeful that Bitcoin may soon retest the $110,000 level, others warn against assuming a straight path higher. The market’s swift recovery above $100,000 reflects resilient institutional demand, but macro and geopolitical headwinds remain.
For now, Bitcoin appears to be holding steady, with global risk sentiment and Fed policy expectations playing key roles in shaping near-term price direction.
