The crypto market surged into bullish territory on Tuesday, buoyed by two pivotal developments: a temporary de-escalation of Middle East tensions and a renewed political offensive aimed at the U.S. Federal Reserve.
Together, these catalysts have injected fresh confidence into a market that had been navigating volatility over the past several weeks.
At the center of the resurgence is Bitcoin, now trading above $105,000 after a sharp rebound from its weekend low.
The leading cryptocurrency had briefly dipped below the six-figure mark before a ceasefire between Israel and Iran was confirmed by U.S. President Donald Trump, an event that appears to have reignited demand across the digital asset landscape.
Ceasefire Recharges Risk Appetite
Markets responded swiftly to Trump’s announcement on Truth Social, where he detailed a phased 12-hour ceasefire that brought a temporary halt to hostilities between Israel and Iran.
Describing the end of what he called the “12-Day War,” Trump noted that Iran had fired a missile at a U.S. military compound in Qatar, though the attack reportedly caused no casualties and was preceded by a warning to Washington.
While the geopolitical situation remains fragile, the development was enough to spark a relief rally in global risk assets, with crypto leading the charge. Bitcoin is now up 3.45% in the last 24 hours, while Ethereum has gained 9%.
XRP, which has been steadily regaining momentum amid renewed attention around Ripple’s legal and regulatory posture, added 7%. Solana outpaced major caps with a 10% jump, helping push total crypto market capitalization beyond $3.24 trillion.
Meme Coins and AI Tokens Lead Sector Rotation
The post-ceasefire optimism spread quickly to high-volatility segments of the market. Meme coins, often seen as speculative risk-on indicators, roared back to life.
Dogecoin (DOGE) jumped 9%, Shiba Inu (SHIB) rose 10%, and PEPE saw a 12% boost. A new wave of memecoins, including SPX6900, Mog Coin, and dogwifhat, exploded with gains exceeding 20%, buoyed by strong retail volume and increased liquidity.
AI tokens also joined the rally as investors rotated into utility-driven assets. Bittensor (TAO) led the charge with a 16% rise, followed by Render (RENDER), which climbed over 14%.
Livepeer (LPT) and Theta Network (THETA) each posted double-digit gains, suggesting renewed interest in decentralized compute and video infrastructure plays.
Market analysts point to the ongoing convergence between AI and blockchain technology as a key narrative that continues to draw both speculative and strategic capital.
Meanwhile, sectors like DePIN (Decentralized Physical Infrastructure Networks) and real-world asset (RWA) protocols registered moderate upticks as risk sentiment improved.
Institutions Return as Crypto ETFs Post $327M Inflows
Institutional behavior reinforced the day’s rally, with capital inflows into crypto ETFs exceeding $327 million. According to data from CoinShares and Glassnode, the bulk of these inflows targeted Bitcoin-related products, although Ethereum also attracted over $100 million in large-scale allocations.
Despite a slight decline in open interest, analysts believe the institutional bid remains intact, particularly as macro headwinds show signs of easing. The combination of lower volatility and improving liquidity has created fertile ground for renewed positioning by hedge funds, asset managers, and family offices.
Trump Slams Fed Over Interest Rates
Adding further fuel to the market was President Trump’s criticism of Federal Reserve Chair Jerome Powell. In another Truth Social post, Trump lambasted Powell for maintaining high interest rates despite what he described as a “non-inflationary” economic environment.
Trump compared the Fed’s inaction to the European Central Bank, which has already enacted ten rate cuts in recent months. He argued that reducing U.S. rates by two to three percentage points could generate up to $800 billion in annual savings for the American economy.
The post has stirred renewed debate over the Fed’s trajectory heading into the second half of 2025. Although the central bank has thus far resisted political pressure, markets are now increasingly pricing in the possibility of a pivot, particularly if macro data softens and political scrutiny intensifies.
Sentiment Shift Signals Market Repricing
With the Crypto Fear & Greed Index hovering around neutral at 49, traders are showing signs of confidence after weeks of caution.
According to Coinglass data, recent sentiment has moved away from extreme fear and is now stabilizing in response to geopolitical clarity and macroeconomic expectations.
Tuesday’s gains reflect a broader recalibration in the digital asset space, one that is being driven as much by shifting narratives as by fundamentals. Bitcoin, Ethereum, and emerging sectors like AI and DePIN are all benefiting from what appears to be a new wave of institutional and retail alignment.
Conclusion: Geopolitics and Policy Are Shaping the New Crypto Cycle
The cryptocurrency market’s latest surge underscores how deeply interconnected digital assets have become with geopolitical and macroeconomic developments.
As the dust settles on the Middle East conflict, for now, and political pressure intensifies on the Fed, investors are seizing the opportunity to re-enter the market.
Bitcoin’s move above $105,000 and the resurgence of altcoins reflect not just short-term optimism, but potentially the early stages of a larger trend reversal. With institutional flows rising and political rhetoric tilting toward monetary accommodation, crypto assets could be preparing for their next leg higher.
