Brent crude prices fell 7% after the U.S. and Iran paused military activity around the Strait of Hormuz, helping lift equities and DeFi tokens, while bitcoin remained close to $65,000 ahead of Wednesday’s key Federal Reserve meeting.
Crypto markets started the week on stronger footing as easing geopolitical tensions provided some support for risk assets. The pause in U.S.-Iran strikes around the Strait of Hormuz pushed Brent crude lower from above $100 to nearly $87 per barrel as diplomatic efforts continued.
The market reaction extended across several asset classes. Nasdaq 100 and S&P 500 futures rose 1.36% and 0.80%, respectively, while gold and silver gained as inflation concerns linked to energy prices eased. The CoinDesk 20 Index (CD20) advanced 0.1% since midnight UTC and posted a 1.6% increase over the past 24 hours.
Bitcoin (BTC) traded slightly below midnight levels at around $65,200 after briefly climbing to $65,600 when futures markets opened Sunday. Although the price move was limited, underlying market sentiment showed signs of improvement.
Ether (ETH) continued to outperform bitcoin, gaining 0.51% to reach about $1,963 and approaching the $2,000 level for the first time since early June.
The Federal Reserve’s upcoming meeting remains a major focus, with policymakers considering whether to raise interest rates for the first time in three years. Inflation has climbed to 4.1% following the surge in oil prices triggered by the Iran conflict.
However, the decline in energy prices has reduced expectations for a rate increase. CME Group’s FedWatch tool now shows markets pricing in a 30.5% probability of a hike on Wednesday, down from 37.4% at Friday’s close.
Derivatives Market Overview
Bitcoin rally pressures bearish traders:
Bitcoin’s move back above $64,000 has created losses for short sellers. Data from futures markets showed that bearish positions accounted for most of the $312 million in liquidations recorded over the past 24 hours.
Futures traders remain cautious:
Despite the spot market recovery, derivatives traders have not fully returned to the market. Bitcoin futures open interest declined to approximately 740,000 BTC after exceeding 760,000 BTC on Friday. Still, positive funding rates and favorable 24-hour cumulative volume delta (CVD) readings suggest traders continue to maintain a bullish bias.
ETH derivatives reinforce strength:
Ether’s recent strength against bitcoin has continued since the June 6 market bottom, and derivatives indicators appear to support the move.
Open interest in ETH futures increased to 14.66 million ETH, the highest level since June 7. Positive funding rates and strong ether OI-adjusted CVD indicate that buyers are actively driving the market through executed trades rather than passive orders.
Open interest changes:
XLM, LTC, and XMR recorded notable increases in open interest, while SHIB and AVAX saw funds move out of their derivatives markets.
Market-wide signals remain mixed:
Despite gains among some tokens, broader market data remains cautious. Only TRX and BNB showed positive 24-hour CVD readings among major cryptocurrencies, while most large-cap assets recorded negative flows, indicating continued selling pressure.
Volatility remains stable:
Bitcoin’s 30-day implied volatility index (BVIV) remained near 40%, slightly above its recent two-month low of around 38%, suggesting relatively calm market conditions. Ether’s implied volatility index (EVIV) reflected a similar trend.
Options sentiment improves slightly:
BTC options listed on Deribit continue to show stronger demand for puts than calls, indicating investors are still seeking downside protection. However, the one-week put-call skew has eased to 9% from nearly 13% on Friday, showing that bearish positioning is gradually weakening. ETH options display a much smaller skew, suggesting more balanced market expectations.
Token Market Performance
DeFi tokens led Monday’s gains, with Aave (AAVE) jumping 9%, Lido (LDO) rising 9.4%, and Ondo (ONDO) adding 7% as its recent rally continued.
Lighter (LIT) reversed recent losses, climbing 4.71% since midnight UTC and 8.91% over 24 hours. The recovery suggests selling pressure may have faded after the token found support near the $2.13 level.
PUMP was the strongest performer of the day, gaining 12% over 24 hours as speculative interest pushed its market capitalization toward $800 million, up from approximately $570 million two weeks earlier.
Zcash (ZEC) underperformed the broader market, falling 1.95% to $497 as the privacy-focused token gave back part of its recent gains. Monero (XMR) also declined 1.24% amid weakness across privacy-oriented cryptocurrencies.
CoinMarketCap’s Altcoin Season Index climbed to 55/100, while the average Relative Strength Index (RSI) improved to 51.88, suggesting sentiment across the crypto market is gradually recovering.
