Bitcoin Pulls Back From Monthly Peak as Oil Surge Revives Inflation Fears

Bitcoin pulled back from a one-month peak as WTI crude oil climbed above $85 for the first time since June, renewing inflation worries and pushing investors toward traditional safe havens such as gold, silver, and Bitcoin while reducing appetite for altcoins.

The crypto market moved lower on Wednesday, with Bitcoin declining about 0.9% since the start of the UTC session to around $65,900, while Ether slipped 0.5% to approximately $1,920.

The decline followed Bitcoin’s strongest level in more than a month on Tuesday, making some profit-taking after the recent advance an expected market reaction.

A major factor influencing sentiment was the sharp rise in oil prices. WTI crude, the U.S. benchmark, moved above $85 per barrel for the first time since June 12 as tensions surrounding the Iran conflict intensified, bringing inflation concerns back into focus and weighing on risk assets.

Stock markets also showed signs of caution, with Nasdaq 100 and S&P 500 futures declining. Meanwhile, gold advanced 0.95% to $4,118 and silver gained 1.2% as investors increased exposure to defensive assets.

The flight toward safety was also reflected across crypto markets. Bitcoin’s dominance increased to 59% as traders moved capital away from altcoins and stablecoins and favored the relative stability of the largest cryptocurrency.

Derivatives Market Overview

Trading activity cools:
Crypto trading volume over the past 24 hours declined 12% to $150 billion, while open interest remained largely unchanged near $116 billion. With liquidations totaling only about $165 million, the market appears to be entering a temporary consolidation phase.

Long and short positions move closer:
The 24-hour long/short ratio tightened to 50.59% long versus 49.41% short, showing less conviction compared with the previous day. Although total futures contracts are always balanced between buyers and sellers, the ratio reflects the number of accounts positioned net long or net short. The narrowing gap suggests bullish momentum is losing strength.

HYPE sees increased short positioning:
Hyperliquid’s HYPE token declined more than 6% over 24 hours, making it one of the weakest performers among major cryptocurrencies. The drop coincided with futures open interest rising to 42.8 million HYPE, the highest level since June 4. Slightly negative annualized perpetual funding rates and a negative 24-hour cumulative volume delta (CVD) indicate traders are increasingly positioning for additional downside.

XLM faces continued selling pressure:
Open interest in Stellar’s XLM futures increased for the third consecutive day, reaching 1 billion tokens. Negative CVD readings show sellers are dominating market orders, helping explain why XLM has struggled to hold above the $0.19 level for a second straight session.

BTC and ETH positions remain stable:
Open interest for Bitcoin and Ether remained mostly unchanged over the last 24 hours, suggesting traders have not made major adjustments despite the recent pullback from Tuesday’s highs.

Broad market selling dominates:
Most major cryptocurrencies, with exceptions including XMR, XAUT, and HBAR, are showing negative 24-hour CVD figures. This indicates sellers currently have the upper hand across much of the market.

Volatility expectations increase:
Bitcoin’s 30-day implied volatility index (BVIV) rose to 40% from 37.5%, suggesting traders are paying more for downside protection as expectations for larger price swings increase. Ether’s volatility index (EVIV) has also started moving higher.

Options traders maintain bullish exposure:
Bitcoin call options continued to dominate Deribit’s 24-hour trading activity, with strong interest around $70,000 and $72,000 strike prices. The demand for calls suggests some traders expect further upside despite short-term weakness. Ether options also showed bullish positioning, with the $3,000 strike becoming the most actively traded contract.

Token Market Highlights

Dash (DASH) recorded the largest decline on Wednesday, falling 4.1% to $33.44, while Hyperliquid’s HYPE dropped 3.42% to $58.79 as it continued retreating from last month’s highs.

Midnight (NIGHT) was the strongest performer over the past 24 hours, jumping 19% after recovering from Monday’s sell-off. Cardano founder Charles Hoskinson praised the project on X, calling it an “incredible ecosystem” with strong technology.

Ether.fi (ETHFI) and Ethena (ENA) moved against the broader market trend, gaining 2.63% and 1.27%, respectively, extending recent strength among DeFi-related tokens.

Ondo (ONDO) remained one of the week’s strongest performers, rising 26% over seven days to around $0.40 as interest in tokenized real-world assets continued despite a cautious macro environment.

CoinMarketCap’s Altcoin Season Index stood at 50/100, slightly below last week’s peak, as investors shifted focus back toward Bitcoin amid renewed market uncertainty.

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