Bitcoin edges over $106,000 amid 'optimistic but measured' trader sentiment

Bitcoin price inched over $106,000 early Monday morning following a volatile weekend stimulated by the ongoing conflict between Iran and Israel.

According to The Block's bitcoin price page , the world's largest cryptocurrency was trading at $106,222 as of 12:30 a.m., ET, up 0.25% in the past 24 hours. 

"Geopolitical instability, such as the recent Israeli strikes on Iranian nuclear sites, briefly pushed BTC down 4%, highlighting bitcoin's sensitivity to risk-off events," said BTC Markets Crypto Analyst Rachael Lucas. "That said, it often rebounds quickly as investors turn to it as a geopolitical hedge."

The crypto analyst added that bitcoin's price action is currently being shaped by a combination of institutional flows, macro data, and geopolitical risk. The cryptocurrency's fear and greed index currently stands at a moderate 61, reflecting "optimistic but measured" investor sentiment, Lucas said.

Amid the rising geopolitical tension, Kronos Research CIO Vincent Liu said he sees strong global liquidity and institutional demand that could set the stage for a breakout once the dust settles.

Spot bitcoin exchange-traded funds saw monthly net inflows of $5.23 billion last month, matching levels seen around U.S. President Donald Trump's election earlier this year, which sent waves of bullish signals throughout the crypto market.

"The recent push through resistance at $106,406 signals continued bullish momentum, with the next major target at the all-time high," Lucas said.

Meanwhile, ether rose 1.48% in the past day to trade at $2,569. While bitcoin dominance holds at around 65%, analysts said ether has been building institutional momentum that could be further boosted by catalysts like DeFi summer.

FOMC this week

This week's mega-event is the Federal Open Market Committee Meeting on Tuesday and Wednesday, which could be a "make-or-break" for BTC and ETH prices, according to Kronos Research's Liu. 

CME Group's FedWatch Tool predicts a 96.7% probability that the Fed would maintain its current interest rate of 4.25% to 4.50%. 

However, Trump has been pressuring Fed Chair Jerome Powell to cut rates by a full percentage point, saying the White House may "have to force something" if that doesn't happen, according to the Financial Times .

Outside of the interest rate decision, any announcements from the Securities and Exchange Commission and Treasury regarding ETFs or stablecoins could affect market sentiment and inflows, analysts said.