Bitcoin hovered around $71,000 on Tuesday, holding onto recent gains even as tensions in the Middle East escalated, with the cryptocurrency continuing to outperform traditional safe-haven assets like gold.
The asset was up roughly 0.25% since midnight UTC, building on a broader 4% advance over the past 24 hours. The wider crypto market also pushed higher, supported by altcoin strength and a wave of short liquidations.
In Asian trading, AI-focused tokens led the upside. Bittensor and Fetch.ai rose 5.8% and 4.1%, respectively, after Jensen Huang suggested that artificial general intelligence may already be a reality, boosting sentiment across the sector.
Geopolitical developments remained the primary driver. 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” discussions, 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, edged about 0.1% lower.
Despite the backdrop, crypto markets have shown notable resilience. Bitcoin has outperformed gold since the conflict began, defying its typical role as a higher-risk asset.
Derivatives signal cautious optimism
More than $550 million in leveraged crypto positions were liquidated over the past 24 hours, with short positions taking the majority of losses, highlighting a squeeze on bearish bets.
Still, the rally has not been fueled by rising leverage. Open interest in bitcoin futures slipped to around 228,000 BTC from 229,000 BTC, with similar declines seen across ether, XRP, and solana markets.
Altcoin futures—including DOGE, ADA, SUI, AVAX, LINK, and PAXG—saw open interest fall by up to 10%, suggesting traders are reducing exposure even as prices rise.
At the same time, most tokens recorded strong buying activity, reflected in positive cumulative volume deltas, while CRO, XMR, and TON lagged with weaker flows.
Funding rates for major perpetual futures remained positive in the 5%–10% range, pointing to a broadly bullish bias.
Options data from Deribit showed continued demand for downside protection in BTC and ETH, though the premium of puts over calls narrowed to 5–6 volatility points from 8–10 earlier, indicating reduced hedging pressure.
Block trades highlighted demand for neutral strategies such as BTC put condors, while ETH flows were dominated by risk reversals.
Altcoins lead, but risks persist
Several altcoins outperformed bitcoin, with tokens like HYPE, OP, and CRV rising around 3% as traders rotated into higher-risk assets in anticipation of a broader breakout.
The CoinDesk 20 Index gained 0.3%, while the altcoin-heavy CoinDesk 80 Index rose more than 1%, reflecting improving sentiment across the sector.
However, challenges remain in parts of the market. The decentralized finance space continues to face pressure following the shutdown of Balancer Labs and a hack involving the Resolv stablecoin project. Market participants also point to limited yield opportunities and elevated risks in DeFi protocols.
The memecoin segment lagged, with the CoinDesk Memecoin Index rising just 0.1%, as several components declined between 3% and 5%.
Overall, crypto markets are showing resilience and gradual improvement in sentiment, but traders remain cautious amid geopolitical uncertainty and mixed signals from derivatives positioning.
