Brent crude dropped 7% after the U.S. and Iran paused strikes near the Strait of Hormuz, boosting global risk appetite and lifting equities and DeFi tokens, while bitcoin held steady around $65,000 ahead of Wednesday’s Federal Reserve decision.
Crypto markets opened the week with a positive tone as reduced geopolitical tensions offered some relief to risk assets. The pause in hostilities between the U.S. and Iran pushed Brent crude prices sharply lower, falling from above $100 to roughly $87 per barrel as diplomatic discussions continued.
The shift was reflected across broader markets. Nasdaq 100 and S&P 500 futures gained 1.36% and 0.80%, respectively, while gold and silver also moved higher as inflation concerns tied to energy prices eased. The CoinDesk 20 Index (CD20) increased 0.1% since midnight UTC and was up 1.6% over the previous 24 hours.
Bitcoin (BTC) traded near $65,200, slightly below its midnight level, after briefly reaching $65,600 when futures markets opened on Sunday. Although the price movement was limited, market sentiment showed signs of improvement.
Ether (ETH) continued to outperform bitcoin, rising 0.51% to around $1,963 and nearing the $2,000 mark for the first time since early June.
The Federal Reserve’s meeting this week remains a major market event, with policymakers weighing whether to increase interest rates for the first time in three years. Inflation currently stands at 4.1%, partly driven by the surge in oil prices following the Iran conflict.
However, the decline in oil prices has lowered expectations for a rate hike. CME Group’s FedWatch tool shows traders now assign a 30.5% probability of a rate increase on Wednesday, down from 37.4% at Friday’s close.
Derivatives Market Update
Bitcoin recovery hurts short sellers:
Bitcoin’s rebound above $64,000 has put pressure on bearish traders. Futures data showed short positions accounted for the majority of the $312 million in liquidations recorded over the past 24 hours.
Futures activity remains cautious:
Despite bitcoin’s spot recovery, futures traders have not fully returned to the market. Open interest dropped to approximately 740,000 BTC from Friday’s peak above 760,000 BTC. However, positive annualized funding rates and a positive 24-hour cumulative volume delta (CVD) indicate that traders are still leaning toward bullish positions.
ETH derivatives confirm continued momentum:
Ether’s outperformance against bitcoin since the June 6 market bottom has continued, with derivatives data supporting the recent price strength.
ETH futures open interest climbed to 14.66 million ETH, the highest level since June 7. Positive funding rates and strong OI-adjusted CVD readings suggest buyers are actively driving the rally through market orders.
Open interest trends:
XLM, LTC, and XMR recorded notable increases in open interest, while SHIB and AVAX experienced capital outflows.
Broader market remains cautious:
Despite gains in selected assets, overall market signals remain mixed. Among major cryptocurrencies, only TRX and BNB showed positive 24-hour CVD readings, while most large-cap tokens recorded negative flows, pointing to continued selling pressure.
Volatility indicators remain stable:
Bitcoin’s 30-day implied volatility index (BVIV) stayed near 40%, slightly above its recent two-month low of around 38%, indicating relatively calm market conditions. Ether’s volatility index (EVIV) showed a similar pattern.
Options market shows easing downside concerns:
BTC options on Deribit continue to trade with puts at a premium to calls, reflecting ongoing demand for downside protection. However, the one-week put-call skew narrowed to 9% from nearly 13% on Friday, suggesting bearish sentiment is fading. ETH options show a much smaller skew, indicating more balanced expectations among traders.
Token Market Highlights
DeFi tokens emerged as the strongest performers on Monday, with Aave (AAVE) climbing 9%, Lido (LDO) gaining 9.4%, and Ondo (ONDO) advancing 7% as its recent momentum continued.
Lighter (LIT) recovered after several sessions of profit-taking, rising 4.71% since midnight UTC and 8.91% over 24 hours. The rebound suggests sellers may have lost momentum around the $2.13 level.
PUMP led the day’s gains, rising 12% over 24 hours as speculative demand pushed its market capitalization close to $800 million, compared with about $570 million two weeks earlier.
Zcash (ZEC) struggled compared with other major tokens, declining 1.95% to $497 as the privacy coin gave back some recent gains. Monero (XMR) also slipped 1.24% amid weakness across privacy-focused cryptocurrencies.
CoinMarketCap’s Altcoin Season Index improved to 55/100, while the average Relative Strength Index (RSI) recovered to 51.88, indicating that overall crypto sentiment is gradually strengthening.
