Crypto slides as oil spike, macro jitters trigger derivatives unwind

The crypto market is reeling from an overnight selloff, with bitcoin $BTC$69,532.83 trading lower at $69,400 having lost 2.6% since midnight UTC and ether ($ETH) heading back toward $2,000 after tumbling by 4.1%.

The declines come alongside a sharp drop in U.S. equities and precious metals. Nasdaq 100 futures are down by around 1% while gold has lost 1.8%.

Oil, meanwhile, spiked back above $100 per barrel as supposed peace talks between the U.S. and Iran stalled.

The altcoin market was the worst hit, with the CoinDesk Computing Select Index (CPUS) and the CoinDesk DeFi Select Index (DFX) tumbling by 4.3% and 3.9%, respectively, during the Asia session.

Zooming out, bitcoin and the broader crypto market are still locked in a price range that has persisted since early February despite multiple attempts to break out to the upside.

Derivatives positioning

• Deadlock in the Iran-U.S. negotiations seems to have triggered renewed risk aversion, leading to capital outflows from crypto derivatives. The cumulative crypto futures open interest (OI) has declined by 3.5% to $108.30 billion.
• OI in PAXG fell nearly 11% in 24 hours, with the gold price falling 1.8% to $4,423 an ounce. $DOGE, ZEC and TAO are other major OI losers.
• Some traders may have shorted $BTC futures on major exchanges as prices dropped below $70,000 during European hours. That's evident from the slight uptick in OI in major dollar- and USDT-denominated exchanges to 232K $BTC from 229K $BTC.
• $ETH, BNB, XPR, SOL, $TRX and $DOGE are seeing negative fund rates, a sign of increased bias for bearish, short positions.
• Meanwhile, CC, $TRX and BCH stand out with positive cumulative volume deltas pointing to positive positioning while other majors including $BTC see seller dominance.
• In the options market, some traders are chasing downside protection in ether by purchasing risk reversals, a position that involves selling calls to fund put option buys, TDX Strategies said in a market note.
• On Deribit, $BTC and $ETH puts remain more expensive than calls across all tenors. At the front end, ether puts are pricier than $BTC's, a sign traders are bracing for a bigger downside in ether in the short-term.

Token talk

• The crypto market is red across the board on Thursday, but some tokens fared worse than others; AI-focused FET is down by 7.7% while ETHFI and RENDER have given back much of the past week's gains, dropping by 6.3% and 5.9%, respectively.
• The "Altcoin Season" index is still at 48/100, suggesting a bullish recovery could be on the cards if the market can find support and consolidate.
• Around half a dozen tokens out of the top 100 remain in the black over the past 24 hours, these include ethena (ENA), up 2.2%, and layer-1 network tokens XDC, NIGHT and $TRX, all between 1% and 2% higher.
• Overall, worryingly low liquidity that has failed to recover since the tail end of 2025, coupled with the fickle nature of crypto retail traders, could create the perfect storm across the altcoin market, producing an exaggerated downturn.