Bitcoin traded near $71,000 on Tuesday, extending its upward momentum even as geopolitical tensions in the Middle East intensified, with the asset continuing to outperform gold.
The leading cryptocurrency was up about 0.25% since midnight UTC, adding to a roughly 4% gain over the past 24 hours. Broader crypto markets also advanced, supported by strength in altcoins and a wave of short liquidations.
During Asian hours, AI-related tokens led the rally. Bittensor and Fetch.ai gained 5.8% and 4.1%, respectively, after comments from Jensen Huang suggesting that artificial general intelligence may already have been achieved, boosting sentiment around the sector.
Geopolitics remained the primary catalyst. Fresh strikes in Tel Aviv and Lebanon kept markets on edge. Earlier, U.S. President Donald Trump said a 48-hour ultimatum tied to the Strait of Hormuz had been paused following “productive” talks, though Iranian officials rejected the claim.
Oil prices held near $100 per barrel, while U.S. equity futures, including the Nasdaq 100 and S&P 500, slipped about 0.1%.
Despite the uncertain backdrop, crypto markets have shown resilience. Bitcoin has outperformed gold since the conflict began, challenging the traditional safe-haven narrative.
Derivatives point to a cautious but improving outlook
More than $550 million in leveraged crypto positions were liquidated over the past 24 hours, with short positions accounting for the majority—highlighting a squeeze on bearish bets.
However, the rally has not been driven by increased leverage. Open interest in bitcoin futures dipped to around 228,000 BTC from 229,000 BTC, with similar declines seen across ether, XRP, and solana markets.
Several altcoin futures, including DOGE, ADA, SUI, AVAX, LINK, and PAXG, recorded open interest drops of up to 10%, suggesting traders are trimming exposure even as prices rise.
At the same time, most tokens showed strong buying pressure, reflected in positive cumulative volume deltas, though CRO, XMR, and TON lagged with weaker flows.
Funding rates for major perpetual contracts remained positive, ranging between 5% and 10%, signaling a broadly bullish bias.
Options data from Deribit showed continued demand for protective puts in BTC and ETH, though the premium over calls narrowed to 5–6 volatility points from 8–10 earlier in the week, indicating reduced hedging demand.
Block trades highlighted interest in neutral strategies such as BTC put condors, while ETH flows were dominated by risk reversals.
Altcoins outperform, but risks linger
Altcoins continued to outpace bitcoin, with tokens like HYPE, OP, and CRV rising around 3% as traders rotated into higher-beta assets in anticipation of a broader market breakout.
The CoinDesk 20 Index gained 0.3%, while the altcoin-heavy CoinDesk 80 Index rose more than 1%, pointing to improving sentiment in the sector.
However, challenges remain, particularly in decentralized finance. The shutdown of Balancer Labs and a hack involving the Resolv stablecoin project have weighed on confidence. Market participants also cite limited yield opportunities and elevated risks in DeFi protocols.
The memecoin segment also lagged, with the CoinDesk Memecoin Index up just 0.1%, as several components declined between 3% and 5%.
Overall, crypto markets are showing resilience and tentative signs of recovery, but traders remain cautious amid geopolitical uncertainty and mixed signals from derivatives markets.
