Bitcoin hovered near $77,000 on Monday as investors responded to signs of progress in diplomatic talks aimed at ending the conflict between the United States and Iran, helping stabilize the cryptocurrency market after weeks of volatility.
The world's largest digital asset traded at approximately $77,300, up less than 1% over the previous 24 hours, after recovering from a sharp correction that had rattled crypto markets over the past three weeks, according to market data reported by The Economic Times.
The move came as broader financial markets reacted positively to reports of ongoing negotiations between Washington and Tehran. Investors have been closely monitoring the conflict because of its impact on global energy supplies, oil prices and overall appetite for risk assets.
Market sentiment improved after U.S. and Iranian officials reported progress in discussions aimed at ending the war and reopening the Strait of Hormuz, a critical shipping route for global oil exports. The prospect of reduced geopolitical tensions pushed oil prices lower and supported gains in equities and other risk-sensitive assets, according to Reuters.
Bitcoin's recent stability marks a turnaround from earlier this month, when escalating tensions in the Middle East weighed heavily on digital assets. On May 18, Bitcoin fell below $77,000 after President Donald Trump warned that Iran's "clock is ticking," prompting a broader sell-off across risk assets and sending oil prices higher, according to CoinDesk.
The cryptocurrency remained under pressure throughout much of the conflict as traders grappled with uncertainty surrounding peace negotiations and the potential impact of higher energy prices on inflation and interest rates. Last week, Bitcoin slipped toward the $77,000 level as investors reduced exposure to risk assets amid concerns that talks between Washington and Tehran could stall, Investing.com reported.
Despite Monday's gains, analysts continued to caution that the crypto market remains vulnerable to sudden swings. Recent trading sessions have been marked by large liquidations and heightened volatility as investors adjusted positions in response to geopolitical developments and shifting expectations for U.S. monetary policy.
Earlier this month, Bitcoin briefly dropped to a two-week low as rising oil prices and concerns over the Middle East conflict fueled fears that inflationary pressures could persist, potentially affecting the Federal Reserve's interest-rate outlook.
Ethereum, the second-largest cryptocurrency by market value, remained under pressure even as Bitcoin stabilized. Several major altcoins also posted mixed performances as traders continued to focus on macroeconomic developments rather than sector-specific news, The Economic Times report said.
The recent trading pattern underscores the growing influence of global economic and geopolitical developments on digital assets. Once viewed primarily as an alternative investment class, Bitcoin has increasingly traded in line with broader market sentiment, particularly during periods of heightened uncertainty.
For now, investors remain focused on developments in the Middle East, with cryptocurrency markets continuing to react alongside stocks, commodities and currencies as negotiations between the United States and Iran progress.
