Bitcoin (BTC) reclaimed the $79,000 level as Wall Street opened for the week, with traders parsing contradictory signals over the United States' conflict with Iran.

Key points:

• Bitcoin moved back above $79,000 while oil prices slipped after US President Donald Trump suggested the Iran war may be nearing its end.
• Markets lifted the probability of a 25-basis-point Federal Reserve rate hike above 90%.
• Bitcoin retested its 50-week exponential moving average after the Sunday weekly close printed below the key trend line.

Bitcoin gains as Trump references end to Iran war

Data from TradingView showed BTC/USD wiping out its weekend losses with a gain of roughly 3% on the day. The fresh upside followed comments from Trump that raised expectations of a peace deal with Iran.

"The failing Nation of Iran wants to make a deal, quickly and badly. I will determine whether or not the U.S.A. will choose to engage - The concept of which we are open to," he wrote in a post on Truth Social.

US equities ticked higher at the opening bell before turning negative, as uncertainty persisted over the fate of critical oil-transit routes in the Middle East. The S&P 500 was 0.3% lower at the time of writing.

Threats to energy flows extended beyond the Strait of Hormuz, with Saudi Arabia's East-West pipeline and the Bab El-Mandeb Strait also under threat as the conflict spread beyond Iran. The Strait of Hormuz ranks among the world's most important oil transit chokepoints, meaning any disruption there draws outsized attention from energy markets. US WTI crude held above $100 per barrel at the time of writing, while Brent traded at $105 per barrel.

Crude prices dipped after Trump doubled down on his prediction of lower oil prices while also alluding to an end to the conflict.

"With the temporary exception of Oil, prices are coming down sharply, and Oil will drop like a rock as soon as the Military Conflict with Iran is over, and that will not be long," read a separate Truth Social post.

Elsewhere, the latest data from CME Group's FedWatch Tool put the probability of a hike at 92.7%, up from 59.4% a week earlier. The Federal Reserve will announce its latest interest-rate decision on Wednesday, with markets predicting a 25-basis-point increase to 3.75-4%. Rate decisions matter for Bitcoin because they shape the liquidity conditions in which risk assets trade, keeping Fed meetings among the most closely watched events on the crypto calendar.

Commenting on the developments, trading company QCP Capital predicted that continued high oil prices would directly influence US financial policy.

"A prolonged disruption would increase the risk of higher energy costs feeding into transport and logistics pricing, potentially lifting inflation expectations and constraining the Fed's ability to pause tightening even as growth slows," QCP wrote on Monday, adding:

"This dynamic creates policy tension: continued energy prices could keep the Fed restrictive, while economic data weakness from higher energy costs could argue for patience."

Focus shifts to Fed wording around interest-rate move

Turning to the implications of the week's Fed decision for BTC price action, QCP argued that risk assets had already priced in a 0.25% hike, with reduced volatility expected as a result.

Related: CLARITY Act vote meets Fed rate hike: Five things to know in Bitcoin this week

The firm also argued that the muted response to last week's Consumer Price Index (CPI) inflation means Fed officials' language now matters more than the decision itself.

"This containment reflects a shift in focus: the binary question of whether the Fed will hike has been answered; the critical issue for positioning is now how policymakers frame the move and what it signals about the path ahead," it wrote.

BTC/USD climbed back above its 50-week exponential moving average (EMA) at $77,430 on Monday after initially closing the weekly candle below. A 50-week EMA averages closing prices across roughly a year of trading, making it a widely used gauge of long-term trend strength and a level watched closely on weekly timeframes. As Cointelegraph reported, the 50-week EMA represents a key support target for Bitcoin bulls to reclaim as part of a bull-market comeback. With spot sitting roughly 2% above the level, Wednesday's Fed announcement stands as the next major macro checkpoint.