Crypto Markets Retreat as Profit-Taking and Geopolitical Tensions Pressure Prices
Crypto’s weekend rally lost momentum on Monday as renewed Middle East tensions triggered a risk-off move, South Korea’s Kospi index dropped 9.2%, and around $253 million in leveraged crypto trades were liquidated.
Bitcoin declined during Asian and European trading sessions, slipping to approximately $63,100 after closing the week above $64,300 at midnight UTC.
The move represented a decline of about 1%, though altcoins experienced sharper losses. Lighter (LIT) suffered the biggest setback, falling 8% in its first significant correction after a rally of more than 200% over the past two months.
The broader risk-off sentiment spread across traditional markets as well. South Korea’s Kospi tumbled 9.2%, driven by a 15% drop in SK Hynix shares after the memory-chip company’s U.S. market debut on Friday. Japan’s Nikkei and China’s SSE Composite also declined more than 2%.
The market downturn came as geopolitical tensions intensified in the Middle East, with the U.S. and Iran exchanging airstrikes amid escalating disputes over the strategic Strait of Hormuz.
U.S. equities were also expected to start lower, with Nasdaq 100 futures down 0.9% and S&P 500 futures declining 0.25% since the start of the session.
However, the pullback followed a strong week for bitcoin and the wider crypto market, which had entered the weekend with improved momentum. Analysts noted that Monday’s weakness may partly reflect investors locking in profits after the recent gains.
Bitcoin Derivatives Remain Stable Despite Market Pullback
Bitcoin derivatives markets showed limited changes over the past week. Open interest remained steady near $17 billion, while the three-month annualized futures basis stayed around 3.8%.
Funding rates were mostly stable and slightly positive across major exchanges, although Bybit recorded a notable exception with BTC perpetual funding rates near -13% annualized.
The combination of steady open interest, stable futures premiums, and balanced funding rates suggests traders are maintaining existing exposure without significantly increasing leverage on either side.
Options markets continued to show a bullish tilt. The 24-hour put/call ratio favored call options by 64% to 36%, while the one-week delta skew remained elevated at 16%. However, the skew has narrowed from 26% a week earlier, indicating that bullish options demand is cooling.
The at-the-money volatility curve remained in contango, with short-term implied volatility around 34%-35% and longer-dated volatility near 43% through mid-2027. This suggests traders expect relatively calm conditions over the longer term.
CoinGlass data showed approximately $253 million in crypto liquidations over the last 24 hours, with long positions accounting for 76% of losses and shorts making up 24%. Bitcoin recorded the largest liquidation volume at $70 million, followed by Ethereum at $60 million.
The Binance liquidation heatmap identifies $62,000 as a key support level to monitor if bitcoin continues lower.
AI Tokens Show Strength While Major Altcoins Decline
Despite broad market weakness, AI-focused tokens FET and NEAR outperformed, each gaining around 1.5%.
Hyperliquid (HYPE) moved lower alongside Lighter, declining about 3.3% to $65.10, marking its lowest level since July 2.
CoinMarketCap’s Altcoin Season indicator reflected improving but cautious market sentiment, rising to 56/100 from last week’s average reading of 50. The increase suggests investors are gradually becoming more willing to take risk following months of heavy selling.
Cardano (ADA) remained among the market’s most volatile assets. After dropping 39% in June, ADA recovered more than 40% during the early July rebound before reversing lower again, losing 19% since July 4.
Jupiter (JUP), the Solana-based decentralized exchange token, also faced continued weakness, falling more than 15% over the past week as daily trading volume declined to approximately $17 million. That compares with much higher activity levels in 2025, when daily volume frequently exceeded $500 million.
