Bitcoin recovered to $74,000 on Friday after falling to a nearly seven-week low in the previous session,
as reports that the US and Iran are close to extending the ceasefire agreement boosted risk appetite.
The world's largest cryptocurrency rose 0.8% to $73,736.6 as of 9:17 AM Moscow time.
Bitcoin fell to around $72,500 in the previous session and is down about 4% for the week. The month-to-date decline was also around 4%.
US and Iran Close to Extending Ceasefire
Investor sentiment improved after reports that Washington and Tehran have agreed in principle to extend the 60-day ceasefire and ease restrictions on shipping through the Strait of Hormuz, although the proposal still awaits final approval from US President Donald Trump.
Easing tensions in the Middle East supported global stock markets and put pressure on oil prices, prompting traders to return to riskier assets, including cryptocurrencies.
Earlier, Bitcoin came under pressure after new US military strikes on Iran-linked targets triggered a flight to traditional safe-haven assets.
Market participants also digested US inflation data released on Thursday, which reinforced expectations that the Federal Reserve could keep interest rates high for an extended period.
Personal consumption expenditures (PCE)—the Fed's preferred measure of inflation—rose 3.8% year-on-year in April, the fastest pace in roughly three years.
Expectations that interest rates will remain high for an extended period are putting pressure on cryptocurrencies this year, reducing demand for speculative assets.
Despite Friday's recovery, Bitcoin remains significantly below its May peak above $82,000 and is heading for a month-long decline as institutional investors continue to withdraw funds from spot Bitcoin ETFs.
According to analytics services, outflows from crypto ETFs over the past two weeks have exceeded $2.5 billion amid heightened geopolitical uncertainty.