Bitcoin rose on improved risk appetite after a temporary ceasefire between the United States and Iran eased geopolitical tensions and pushed oil prices lower.

However, analysts cautioned that a sustained breakout will depend on inflation and interest-rate expectations, Khaleej Times reported.

The cryptocurrency climbed as much as 4.9 per cent to about $72,700 in early Asian trading before easing to around $71,000, its highest level in three weeks.

The gains followed news that Donald Trump agreed to a two-week ceasefire linked to reopening the Strait of Hormuz, sending crude prices lower and lifting global sentiment, according to Khaleej Times.

The rally spread across digital assets, with Ether rising more than 6 per cent to around $2,250, while major altcoins also advanced. Total crypto market capitalisation rose to about $2.5 trillion.

Despite the rebound, Bitcoin remains more than 40 per cent below its record high of roughly $126,000 reached in October last year, underscoring the fragility of the recovery after weeks of range-bound trading.

Analysts said lower oil prices have helped ease inflation concerns, supporting liquidity expectations and demand for risk assets. Jeff Mei of BTSE told Khaleej Times that crypto’s next move will depend on how energy markets shape inflation and monetary policy, with potential US Federal Reserve rate cuts seen as a key catalyst.

Institutional demand has offered support, with Bitcoin exchange-traded funds drawing about $471 million in inflows over the past week, according to Akshat Siddhant of Mudrex..

Still, analysts say technical signals remain mixed. Jamie Coutts of Real Vision told Khaleej Times the rally is constructive but falls short of confirming a clear breakout.

For now, the ceasefire has lifted sentiment, but a sustained bull run will depend on easing inflation and stronger institutional flows in the months ahead.