Bitcoin hovered near $71,000 on Tuesday, extending its recent advance despite escalating tensions in the Middle East, with the asset continuing to outperform gold and other traditional safe havens.
The cryptocurrency was up about 0.25% since midnight UTC, building on a roughly 4% gain over the past 24 hours. Broader crypto markets also pushed higher, supported by altcoin strength and a wave of short liquidations.
In Asian trading, AI-linked tokens led the move. Bittensor and Fetch.ai rose 5.8% and 4.1%, respectively, after Jensen Huang said artificial general intelligence may already be a reality, boosting sentiment around the sector.
Geopolitical developments remained the key driver. Fresh strikes in Tel Aviv and Lebanon kept markets on edge. Earlier, U.S. President Donald Trump said a 48-hour ultimatum tied to the Strait of Hormuz had been paused following “productive” discussions, though Iranian officials dismissed the claim.
Oil held near $100 per barrel, while U.S. equity futures, including the Nasdaq 100 and S&P 500, slipped about 0.1%.
Despite the backdrop, crypto markets have shown notable resilience. Bitcoin has outperformed gold since the conflict began, challenging its role as the dominant safe-haven asset.
Derivatives data signals cautious positioning
Over $550 million in leveraged crypto positions were liquidated in the past 24 hours, with short positions accounting for most of the losses, underscoring a squeeze on bearish bets.
However, the rally has not been driven by rising leverage. Open interest in bitcoin futures edged down to around 228,000 BTC from 229,000 BTC, with similar declines observed in ether, XRP, and solana markets.
Altcoin futures, including DOGE, ADA, SUI, AVAX, LINK, and PAXG, saw open interest fall by as much as 10%, suggesting traders are scaling back exposure even as prices climb.
At the same time, buying activity remained strong across most tokens, reflected in positive cumulative volume deltas, though CRO, XMR, and TON lagged with weaker flows.
Funding rates for major perpetual contracts stayed positive in the 5%–10% range, indicating a still-bullish bias.
Options data from Deribit showed continued demand for downside protection in BTC and ETH, though the premium for put options over calls narrowed to 5–6 volatility points from 8–10 earlier, signaling reduced hedging pressure.
Block trades highlighted interest in neutral strategies such as BTC put condors, while ETH flows were dominated by risk reversals.
Altcoins outperform, but cracks remain
Several altcoins outpaced bitcoin, with tokens like HYPE, OP, and CRV rising around 3% as traders rotated into higher-risk assets in anticipation of a broader breakout.
The CoinDesk 20 Index, which is more bitcoin-heavy, rose 0.3%, while the altcoin-focused CoinDesk 80 Index gained over 1%, reflecting improving sentiment in the sector.
Still, challenges persist in parts of the market. The decentralized finance space remains under pressure following the shutdown of Balancer Labs and a hack involving the Resolv stablecoin project. Market participants also point to limited yield opportunities and elevated risks within DeFi.
The memecoin segment continues to lag, with the CoinDesk Memecoin Index up just 0.1% as several components declined between 3% and 5%.
Overall, while crypto markets are showing resilience and a gradual improvement in sentiment, traders remain cautious amid geopolitical uncertainty and mixed signals from derivatives positioning.
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