Bitcoin steadies as oil rally boosts Fed hike bets

In New York trading, bitcoin steadied and U.S. equities were largely flat after an early drop, while oil prices surged and traders increased the odds of additional Federal Reserve rate hikes.

During the U.S. session, technology shares underperformed and energy stocks gained as crude climbed. Short-term U.S. Treasury yields rose and the dollar strengthened.

Market participants pointed to tighter supply sentiment and stronger demand expectations across major consuming regions for the rise in crude prices.

Rising fuel costs add to headline inflation measures. Futures and options markets reflected a higher probability that the Fed will tighten policy further, based on shifts in pricing.

Risk-sensitive assets moved lower earlier in the day; bitcoin fell with equities before stabilizing later in the session. Some market analysts observed that short-term correlations between bitcoin and U.S. risk assets can change when rate expectations shift rapidly.

Other indicators were consistent with higher rate expectations: short-term yields climbed, the dollar firmed and safe-haven assets showed mixed reactions. Commodity markets beyond oil recorded varied responses as traders reassessed demand for the remainder of the year.

Investors awaited upcoming economic reports and central-bank commentary that could clarify the outlook for inflation and interest rates. Until those signals arrive, trading remained cautious.