coindesk.com
The crypto market opened the week on a positive note as a shift in the Middle East offered a modicum of relief to risk assets. The U.S. and Iran paused strikes over the Strait of Hormuz, sending Brent crude tumbling from above $100 to around $87 per barrel as mediators continued talks.
The move was felt across multiple asset classes. Nasdaq 100 and S&P 500 index futures are up 1.36% and 0.80%, respectively, while gold and silver are both higher as inflation fears unwind. The CoinDesk 20 Index (CD20) has gained 0.1% since midnight UTC, 1.6% over 24 hours.
Bitcoin $BTC$65,385.72 is lower since midnight at $65,200, though this follows a spike to $65,600 at the start of futures trading on Sunday. The little-changed reading masks an underlying improvement in sentiment.
Ether ($ETH) outperformed bitcoin on Monday, rising 0.51% to $1,963 and approaching the psychologically significant $2,000 level for the first time since the beginning of June.
The Fed is meeting this week and faces a decision on whether to raise interest rates for the first time in three years, with inflation running at 4.1% on the back of the oil surge spurred by the Iran war.
The pause in hostilities trimmed the odds of a hike, with markets now pricing a 30.5% chance of a move on Wednesday, down from 37.4% at Friday's close, according to CME Group's FedWatch tool.
Derivatives positioning
- Bears take the hit as $BTC bounces: Bears are paying the price for $BTC's positive turnaround since Sunday, which lifted the spot price back above $64,000. Futures liquidations data show forced closures of short (that is, bearish) bets accounted for most of the 24-hour liquidation tally of $312 million.
- Futures traders sit out the bounce: Futures traders don't appear to be fully participating in the spot-price bounce. Open interest (OI) pulled back to 740K $BTC from Friday's spike to over 760K $BTC. However, both annualized funding rates and the 24-hour cumulative volume delta (CVD) are positive, which could suggest a bullish bias in positioning.
- $ETH futures confirm the outperformance: $ETH outperformed $BTC over the past 24 hours, extending the trend seen since the June 6 market bottom, and futures data appears to validate the price action.
- OI in $ETH futures has jumped to 14.66 million $ETH, the highest since June 7. More notably, funding rates remain positive, and ether’s 24-hour OI-adjusted CVD is the most positive among major cryptocurrencies. That’s a sign bulls may be leading the price action through market orders rather than passive limit orders.
- OI movers, gainers and laggards: Other major OI gainers include XLM, LTC and XMR, while SHIB and AVAX have seen capital outflows.
- Broader market looks bearish: Still, the broader market looks bearish, with only TRX and BNB also showing positive 24-hour CVDs. The rest of the majors have negative prints, which could point to bearish leadership elsewhere in the market.
- Volatility indexes signal calm: Bitcoin's 30-day implied volatility index, BVIV, is in stasis near 40%, just above the recent two-month low of around 38% in a possible sign of market stability. Ether's index, EVIV, is flashing a similar signal.
- Options skew, downside bias cooling: In Deribit-listed options, $BTC puts continue to trade pricier than calls, suggesting a persistent bias toward downside protection. That said, at the front end, the put bias appears to be weakening, with the one-week put-call skew now at 9% versus nearly 13% on Friday. $ETH skews are overall much lower than $BTC's, pointing to relatively measured demand for downside protection in $ETH.