The cryptocurrency market opened the week on a positive note, buoyed by growing optimism across digital assets. Bitcoin saw an early-day gain of 2.1 percent, while ether advanced by 3.1 percent. Momentum was even stronger in the altcoin segment, with tokens such as Chiliz and Optimism recording increases exceeding 6 percent.
Geopolitical tensions shape investor sentiment
Despite these gains, market participants remained cautious as tensions between Iran and Western powers extended into a fifth week. Even with Pakistan expressing readiness to mediate peace talks, investors were hesitant to fully embrace the prospect of de-escalation. Over the weekend, Brent crude oil prices surged to $108 per barrel—far above the pre-conflict levels near $70—underscoring persistent uncertainty in broader markets.
Shift in volatility and futures markets
Nevertheless, signals of optimism emerged elsewhere: U.S. stock index futures rose in response to Pakistan’s overture, with Nasdaq 100 and S&P 500 futures both up by 0.25 percent. The dollar index was unchanged at 100.2 points, reflecting cautious tranquility across currency markets.
Yet, from a broader perspective, the cryptocurrency market continues its sideways-to-downward trend. Since October, both peaks and lows have shown a pattern of gradual decline. Bitcoin has stayed in a narrow band between $75,000 and $62,800 since early February, unable to break decisively in either direction.
Bitcoin futures open interest, which peaked at a two-month high, recently plateaued. Over the weekend, open interest rose to approximately 748.65 BTC, but with funding rates hovering near zero and 24-hour volume showing negative values, a bias toward short positions still prevails. This suggests many traders expect prices to fall in the short term.
When Bitcoin’s price dipped to $65,000 during the Asian session, a surge in spot buying drove prices higher, causing futures open interest to decline. The episode suggests recent gains have been led by spot investors, while those using leverage remain hesitant. On Bitfinex, the number of BTC/USD long positions has reached its highest point since November 2023—a level that, historically, has preceded sharp corrections in the past.
There was little notable change in futures open interest over the past 24 hours for market leaders such as XRP, ETH, DOGE, and SOL. However, AVAX and LTC saw double-digit percentage growth in open positions, most of which, based on negative volume data, appear to be short bets profiting from potential declines.
The 30-day volatility index for Bitcoin fell back to 55 percent after peaking at 58 percent during the weekend. Despite volatility in traditional markets driven by Iran-related headlines, the cryptocurrency space showed relative calm. Ether’s volatility index showed similar dynamics, hinting at a steady environment among the largest tokens.
On the Deribit platform, put options for both bitcoin and ether remain more expensive than calls across all maturities, indicating continued bearish sentiment. The negative gamma balance between the $65,000 to $70,000 range could help reinforce the current sideways pattern in Bitcoin’s price.
Among sector-specific indices, the CoinDesk Memecoin Index and DeFi Select Index outperformed on Monday, each rising by over 2 percent. The CoinDesk 20 Index, dominated by bitcoin, also posted a 1.5 percent gain, marking a healthy start to the trading week across multiple crypto segments.
Liquidity conditions played a major role behind this movement in the altcoin market. On Friday, a sharp sell-off led to supply exceeding demand on major exchanges, pushing many assets into what technical analysts call “oversold” territory. This in turn laid the groundwork for the current rebound, as opportunistic buyers stepped in to take advantage of lower prices.
