Anndy Lian
What drives Bitcoin’s rally? Decoding market forces in 2025
As of June 26, 2025, the global financial landscape has been characterised by a steady risk sentiment, with traders meticulously evaluating a blend of simmering economic uncertainties and geopolitical developments. Among the standout stories in this environment is Bitcoin’s remarkable rally, which has seen the world’s leading cryptocurrency surge by approximately 10 per cent since Sunday, June 22.
This upward trajectory has propelled Bitcoin past US$108,200 by Wednesday, June 25, according to Coinbase data from TradingView, marking a significant recovery from its recent low of around US$98,400. At the same time, broader markets, including US equities, have displayed mixed performances, while key economic indicators and central bank commentary continue to shape investor outlooks.
I’ll unpack the driving forces behind Bitcoin’s rally, explore its interplay with the broader economic context, and offer my perspective on what this means for the cryptocurrency’s near-term future, all grounded in the latest data and market insights.
Bitcoin’s rally: A geopolitical tailwind
One of the most compelling explanations for Bitcoin’s recent surge lies in the easing of geopolitical tensions, particularly in the Middle East. Analysts across the board have identified a reduction in conflict-related concerns as the primary catalyst for this rally. To understand why this matters, it’s worth considering how geopolitical risks influence investor behaviour. When tensions flare, whether through military escalations or political instability, markets often see a flight to safety.
Investors flock to traditional safe-haven assets, such as gold, US Treasuries, or even the US dollar, while riskier assets, including cryptocurrencies, tend to face selling pressure. Bitcoin, despite its occasional reputation as “digital gold,” is still primarily perceived as a speculative investment, making it sensitive to such shifts in sentiment.
The flip side, however, is equally telling. As fears of conflict in the Middle East have subsided over recent days, the perceived risk in the global environment has diminished. This has emboldened investors to re-embrace risk assets, with Bitcoin emerging as a beneficiary. The nearly 10 per cent gain since Sunday reflects this renewed appetite, as traders interpret the cooling tensions as a green light to allocate capital to high-growth opportunities.
This dynamic underscores Bitcoin’s dual nature: it thrives in times of risk-on sentiment but remains vulnerable to sudden geopolitical shocks. While the current calm has fuelled its rally, any unexpected flare-up could swiftly alter the narrative, a point I’ll revisit later when assessing risks.
Technical indicators: A bullish setup
Beyond the geopolitical backdrop, Bitcoin’s price action is supported by robust technical indicators, which offer a window into its momentum and potential trajectory. Let’s start with the Exponential Moving Averages (EMAs)—specifically the 20-day, 50-day, 100-day, and 200-day lines. These are critical tools for traders, helping to smooth out price data and identify trends.
As of now, all four EMAs sit below Bitcoin’s current price trend, a configuration that signals increasing volatility and a strong upward movement. When shorter-term EMAs (like the 20-day) and longer-term ones (like the 200-day) align below the price, it often indicates that the asset is in a bullish phase, with buying pressure outpacing selling. For Bitcoin, this setup suggests that the rally has legs, at least in the short term.
Complementing this is the Stochastic Relative Strength Index (RSI), another key indicator that measures momentum on a scale from 0 to 100. In the daily time frame, Bitcoin’s Stochastic RSI has broken out of its oversold range (below 20) and is now approaching the overbought territory (above 80). The three-day average trendline is on the cusp of retesting this upper threshold, reinforcing the notion of strong upward momentum.
In simpler terms, this tells us that Bitcoin has shifted from being undervalued to potentially overvalued in a short span, a classic sign of a powerful rally. I’d caution that an approach to overbought levels can also signal a looming correction if momentum stalls. For now, though, the technicals paint a positive picture.
What does this mean for Bitcoin’s price targets? If the bullish trend holds, we could see it test resistance at US$109,631 soon, with a stretch goal of US$111,970 in the coming days. On the other hand, a bearish reversal, perhaps triggered by external shocks, might pull it back to immediate support at US$107,218, or even down to US$104,810 if sentiment worsens further. These levels, derived from recent price action, are critical markers for traders and will likely dictate Bitcoin’s next moves.
The broader economic picture: Mixed signals and Fed focus
While Bitcoin’s rally grabs headlines, it’s unfolding against a complex economic backdrop that warrants a closer look. On Wednesday, June 25, US stock markets closed with a mixed performance: the Dow Jones Industrial Average slipped 0.25 per cent, the S&P 500 remained flat, and the Nasdaq Composite edged up 0.31 per cent. This divergence suggests uncertainty among investors, possibly reflecting unease about the direction of the economy or geopolitical risks.
The Dow’s decline might signal concerns in industrial or traditional sectors, while the Nasdaq’s gain points to resilience in tech, a sector often aligned with Bitcoin’s risk profile. From my vantage point, this mixed performance suggests markets are in a wait-and-see mode, awaiting clearer signals.
A focal point on Wednesday was Federal Reserve Chair Jerome Powell’s testimony, his second day addressing lawmakers. Powell acknowledged the difficulty in gauging how tariffs might affect consumer prices—a nod to ongoing trade tensions—while touting the US economy as the world’s strongest.
His call for cautious, deliberate policy moves in uncertain times struck me as pragmatic. The Fed’s slow-and-steady approach could stabilise markets, but it also leaves room for speculation about future rate decisions, especially with big data drops on the horizon.
On Thursday, June 26, the US economic calendar is packed: the third reading of Q1 2025 GDP, weekly initial jobless claims, and May’s advance goods trade balance are all due. These releases could alter expectations about growth and inflation, indirectly affecting Bitcoin through shifts in risk sentiment.
Meanwhile, bond markets offered little drama. US Treasury yields were steady, with the 10-year yield dipping less than 1 basis point to 4.28 per cent and the two-year yield easing to 3.77 per cent. Stable yields suggest that no major recalibration of interest rate expectations is yet needed. The US dollar, which settled at 97.68 (-0.18 per cent), also held steady.
However, it wobbled early Thursday after a media report suggested that President Donald Trump might replace Powell as Fed Chair, despite 11 months remaining in his term. This rumor, if substantiated, could inject volatility into markets, including Bitcoin, given the Fed’s outsized role in shaping monetary conditions.
Personally, I find the timing curious, 11 months is an eternity in politics, and I’d wager it’s more noise than signal for now. Still, it’s a wildcard worth watching.
Commodities and global markets: A steady pulse
Elsewhere, commodity markets provided additional context. Gold ticked up 0.1 per cent to US$3,327.91 per ounce, a modest gain for a classic safe-haven asset. Brent crude oil, after a sharp selloff earlier in the week, climbed 0.8 per cent to US$67.68 per barrel. These movements suggest a market that’s cautious but not panicked, gold’s slight rise reflects lingering unease, while oil’s rebound might signal stabilising demand.
In Asia, equities opened higher on Thursday, a sign of tentative optimism, while US equity futures pointed to a flat opening, mirroring the indecision seen the previous day. Together, these threads weave a tapestry of steady risk sentiment, with Bitcoin’s rally standing out as a bold stroke.
My take: Bitcoin’s rally in perspective
So, what’s my view on all this? Bitcoin’s 10 per cent surge since Sunday is impressive, no doubt, and the confluence of easing Middle East tensions and bullish technicals makes a compelling case for its strength. I view it as a classic risk-on move—investors, relieved by a quieter geopolitical landscape, are piling into an asset known for its outsized returns.
The technical indicators reinforce this, indicating a market in a full bullish tilt. If I were trading, I’d be eyeing that US$109,631 resistance with interest, maybe even US$111,970 if momentum holds.
But here’s where I temper my enthusiasm. The broader economic context feels like a tightrope walk. The mixed US stock performance, steady yields, and Powell’s cautious tone tell me that while things aren’t falling apart, they’re not exactly roaring either. Thursday’s data dump could shift the mood. Strong GDP or jobless claims might fuel more risk-taking, while weak numbers could dampen it.
The Fed Chair rumor adds another layer of intrigue; a leadership shake-up could rattle markets, though I suspect it’s too early to call. Geopolitics, too, remains a wild card; one misstep in the Middle East, and Bitcoin could see a swift pullback to US$107,218 or lower.
For me, Bitcoin’s rally is a microcosm of today’s market: opportunity wrapped in uncertainty. It’s riding a wave of positive sentiment, but that wave could break if external pressures mount.
Source: https://e27.co/what-drives-bitcoins-rally-decoding-market-forces-in-2025-20250626/
The post What drives Bitcoin’s rally? Decoding market forces in 2025 appeared first on Anndy Lian by Anndy Lian.
