Bitcoin is currently trading at around $71,000, having risen 0.25% since midnight UTC, adding to a broader 4% 24-hour rally.
Asian times have been favorable for AI tokens, with bittensor (TAO) and adding 5.8% and 4.1% each. The increase follows comments from Nvidia CEO Jensen Huang who claimed that artificial general intelligence (AGI) – a term for AI that matches the cognitive abilities of human beings – has already been achieved.
However, the main driver of the market 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 on the Strait of Hormuz had been suspended following “good and productive” peace talks with Iran, although Iranian officials called it “fake news”.
Oil remains around $100 a barrel while U.S. stocks are in the red, with Nasdaq 100 and S&P 500 futures both down about 0.1% since midnight.
The crypto market has remained relatively resilient during the conflict, with bitcoin having outperformed gold, a traditional safe-haven asset, since the start of the war.
Positioning of derivative products
- More than $550 million in leveraged cryptocurrency futures bets were liquidated in 24 hours, with short or bearish bets taking the brunt of the hit.
- Bitcon’s 4% 24-hour price gain is not supported by increased futures participation as open interest (OI) on major USD- and USDT-denominated futures contracts fell to 228,000 BTC from 229,000 BTC.
- A similar trend is observed in the ETH, XRP and SOL markets.
- DOGE, ADA, SUI, AVAX, LINK, and PAXG futures saw open interest decline by up to 10%.
- Most tokens saw aggressive bidding, as evidenced by their positive 24-hour cumulative volume deltas. CRO, XMR and TON stand out with negative CVDs.
- The majors’ perpetual funding rates also paint an optimistic picture, with values between 5% and 10%.
- On Deribit, BTC and ETH puts continue to show a clear bias towards protective puts across all time frames. However, they now trade at a 5-6 point volatility premium over calls, up from 8-10 early Monday.
- Block flows presented demand for the BTC put condor, a directionally neutral strategy designed to take advantage of low volatility. In the case of ETH, risk reversals dominated the flows.
Symbolic discussion
- Several altcoins have outperformed bitcoin since midnight, with HYPE, OP and CRV all gaining around 3% as traders turned to more speculative assets in anticipation of a broader market breakout.
- The Bitcoin-dominated CoinDesk 20 Index (CD20) rose 0.3% on Tuesday, while the altcoin-heavy CoinDesk 80 (CD80) rose more than 1%, indicating improving sentiment within the altcoin sector.
- The caveat to improving sentiment is the state of the DeFi industry. One market observer described the current landscape as a “really dark” time after the closure of Balancer Labs and the hack of the Resolv stablecoin project. criticized the lack of return opportunities coupled with the inherent risk of using DeFi protocols.
- The memecoin sector is also under strain. The CoinDesk Memecoin Index (CDMEME) was the worst-performing benchmark on Tuesday, rising just 0.1%, with several index constituents losing 3-5%.
