Bitcoin and the broader crypto market moved lower as traders locked in profits after BTC reached a monthly high, while renewed geopolitical tensions involving Iran and U.S. military targets added to selling pressure. Bears took control across much of the market.
Bitcoin slipped 1.1% and ether declined 1.7% since midnight UTC as sellers returned following the recent rally.
The pullback came after bitcoin climbed to $65,500 on Wednesday, marking its highest level of the month. The move encouraged some investors to take profits after the short-term price recovery.
Altcoins also faced weakness, with PUMP and ZEC both falling 4.4% after their previous rallies lost momentum. The declines highlighted fragile liquidity conditions and a lack of strong buying support.
U.S. equities followed a similar pattern. Nasdaq 100 futures dropped 0.25%, extending a downward trend that has lasted for the past month.
Geopolitical uncertainty remained a key driver of market sentiment. Iran launched attacks on U.S. military bases in Gulf countries on Thursday, while the U.S. continued its airstrike campaign, increasing concerns across global risk markets.
Derivatives Data Shows Traders Reducing Risk
Ether’s decline slightly exceeded bitcoin’s, but the move appears to be linked more to the closing of bullish positions than aggressive new short selling.
Open interest in ether futures fell to 14.35 million ETH from Wednesday’s five-week high of 14.45 million ETH, suggesting traders were reducing exposure after the recent price increase. Bitcoin derivatives showed similar signs of position unwinding.
XRP futures open interest climbed to a 10-day high of 2.21 billion XRP despite the token’s spot price falling 0.6%. While the increase may point to growing bearish positioning, positive funding rates indicate that some traders still maintain bullish exposure.
The token’s 24-hour cumulative volume delta (CVD) turned negative, suggesting that short positions are being opened through immediate market orders rather than passive limit orders.
SUI also saw increased derivatives activity, with open interest rising 15%. However, its total open interest of 654 million tokens remains within the range recorded earlier in the week. The token price declined nearly 2% over 24 hours.
Across the crypto market, most assets excluding bitcoin, ether, and Monero recorded negative open-interest-adjusted CVD readings, signaling that sellers are currently driving price movements.
Bitcoin’s 30-day implied volatility increased 2% to 38%. Historically, volatility levels below 40% have often been followed by renewed market instability as prices move toward their long-term volatility average.
Options activity also showed continued bullish bets. Deribit data indicated growing interest in bitcoin call options with $70,000 and $72,000 strike prices, likely linked to a large call spread targeting a move toward $72,000 by the end of July.
For ether, the most active bullish options trade was a July-expiry call contract with a $2,300 strike price.
Altcoin Market Faces Broad Declines
MORPHO was one of the few tokens to outperform the broader market, rising 3.5% since midnight as it attempted to retest the $2.20 resistance level. The token previously failed to break above that level on July 2, leading to a drop toward $1.85.
Most major altcoins followed bitcoin and ether lower. HYPE, SOL, and ENA fell between 1.3% and 1.8%, while NEAR, JUP, and DASH recorded deeper losses.
CoinMarketCap’s Altcoin Season Index remained unchanged at 48 out of 100 after declining from 58 earlier in the week as investors shifted attention back toward bitcoin.
Memecoins continued to attract interest, particularly those launched on Robinhood’s new blockchain. Cashcat (CASHCAT) surged from relative obscurity to a $220 million market capitalization during the first week after Robinhood Chain launched.
The token has since dropped to around a $91 million market cap, although it continues to generate approximately $60 million in daily trading volume.
