Bitcoin advanced on Tuesday, reaching approximately $65,500 to mark its highest level in two weeks. This surge came as a sell-off in semiconductor stocks, which had pressured cryptocurrencies lower last week, reversed course, with Asian chip shares leading a broad-based rebound in risk assets.

The leading cryptocurrency gained 1% on the day and 5% for the week, with trading volume around $33 billion. Ethereum once again outperformed among the two largest tokens, reaching $1,922 with a 3% daily gain and an 8% increase over seven sessions. XRP rose 3% to $1.13, up 6% this week, while Solana gained 2% to $78. BNB held steady at $574 and Dogecoin was flat. Hyperliquid's HYPE token increased 4% to $63, though it remained the only major token in negative territory for the week.

The recovery began where the damage was done last week. The MSCI Asia Pacific equity index climbed 2%, marking its first gain in four trading days, with Samsung and Taiwan Semiconductor Manufacturing Company serving as the primary drivers.

Two additional factors supported the price action. U.S.-listed spot Bitcoin exchange-traded funds have recorded net inflows for five consecutive sessions, accumulating over $600 million. This represents the most sustained institutional buying since mid-July and reverses an eight-week outflow trend that persisted through late June.

Meanwhile, oil prices retreated after two consecutive days of gains driven by war-related concerns. Brent crude fell 1% to around $88.58 after Iran stated that mediators were conveying proposals to de-escalate hostilities, including an alleged suggestion for a 10-day pause in strikes.

Current prices for Bitcoin and Ethereum are considered low but reasonable given the prevailing macro uncertainty in the market, according to Jeff Mei, Chief Operating Officer of BTSE. He noted that traders are positioning around the upcoming Federal Reserve meeting.

Traders anticipate that interest rates will remain stable but are seeking more signals about what may happen later this year, Mei added.

The Federal Reserve is scheduled to meet on July 28 and 29. Market pricing suggests about a 15% probability of a rate hike in July, though a move in September remains a possibility.

Despite the price increases, trading volume in the spot cryptocurrency market remains subdued. This indicates the improvement in market sentiment stems primarily from a return of risk appetite rather than new investment conviction.

The same forces that drove market movements earlier this month are now pointing in the opposite direction. Bitcoin declined last week due to falling Asian chip stocks; its rise to a two-week high this week is attributed to the rebound in those same shares.