Bitcoin reclaims $65,000 as Fed decision tests the rebound

Bitcoin's recovery above $65,000 may be vulnerable to a shift in US interest-rate expectations. The rebound followed a pause in US-Iran strikes that eased pressure on risk assets and pushed Brent crude 6.5% lower to about $90.45 a barrel. Bitcoin rose roughly 1% to $65,155 on Monday, while Ethereum climbed 4% to around $1,964.

The Federal Reserve's decision on Wednesday now takes center stage. Fed funds futures put the chance of a 25-basis-point hike at about one in three, up from 16% a week earlier. Around two-thirds of the market still expects rates to remain at 3.50% to 3.75%, but the jump in oil prices has revived concerns about inflation and Treasury yields.

A rate hold may not be enough to support Bitcoin. Chair Kevin Warsh could still signal that higher energy costs may require tighter policy, while markets already assign a roughly 77% chance of a hike by September. A softer message could pull yields lower and give the rebound more room.

Thursday's GDP, income and spending data will provide another test. Options positioning has become less defensive, with Bitcoin's put-to-call ratio falling to about 0.52 from 0.76 in late June. That suggests traders see less immediate downside risk, even as longer-term uncertainty remains.