Bitcoin currently trading at around $71,000 after rising 0.25% since midnight UTC, adding to a broader 24-hour rally of 4%.
Asian hours were favorable for AI tokens, with bit tensor (TAO) and adding 5.8% and 4.1% each. The increase followed comments from Nvidia CEO Jensen Huang, who claimed that artificial general intelligence (AGI) – a term for AI that matches human cognitive abilities – has already been achieved.
Still, the main market driver remains the war in the Middle East after new strikes in Tel Aviv and Lebanon on Tuesday. On Monday, US President Donald Trump said a 48-hour ultimatum over the Strait of Hormuz had been put on hold after “good and productive” peace talks with Iran, although Iranian officials called it “fake news”.
Oil is still around $100 per barrel. barrel, while U.S. stocks are in the red, with Nasdaq 100 futures and S&P 500 futures both down about 0.1% since midnight.
The crypto market has been relatively resilient during the conflict, with bitcoin outperforming gold, a traditional safe haven, since the start of the war.
Derivatives positioning
- Over $550 million in leveraged crypto futures bets have been liquidated in 24 hours, with shorts or bearish bets taking most of the hit.
- Bitcoin’s 4%, 24-hour gain is not supported by increased participation in futures, as open interest (OI) in major USD- and USDT-denominated futures has fallen to 228,000 BTC from 229,000 BTC.
- A similar pattern is seen in the ETH, XRP and SOL markets.
- DOGE, ADA, SUI, AVAX, LINK and PAXG futures have seen open interest decline by as much as 10%.
- Most tokens have experienced aggressive bidding as evidenced by their positive 24-hour cumulative volume deltas. CRO, XMR and TON stand out with negative CVDs.
- Perpetual funding rates for majors also paint a bullish picture with values between 5% and 10%.
- On Deribit, BTC and ETH puts continue to show a net bias for protective put options across all timeframes. But they are now trading at a 5 to 6 volatility point premium to calls versus 8 to 10 early Monday.
- Block flows contained demand for the BTC put condor, a directionally neutral strategy designed to take advantage of low volatility. In ETH’s case, risk returns dominated flows.
Token talk
- Several altcoins have outperformed bitcoin since midnight, with HYPE, OP and CRV all up around 3% as traders rotated into more speculative assets in anticipation of a broader market breakout.
- The bitcoin-dominant CoinDesk 20 (CD20) index is up 0.3% on Tuesday, while the altcoin-heavy CoinDesk 80 (CD80) is up more than 1%, indicating improved sentiment among the altcoin sector.
- The caveat to the improved sentiment is the state of the DeFi industry. One market observer described the current landscape as a “really dark” period after Balancer Labs shut down and the Resolv stablecoin project was hacked. Another criticized the lack of dividend opportunities combined with the inherent risk that comes with using DeFi protocols.
- The memecoin sector is another sense of the strain. The CoinDesk Memecoin Index (CDMEME) is the worst performing benchmark on Tuesday, gaining just 0.1%, with several of the index components losing 3%-5%.
