Crypto Rebounds as Iran-U.S. Ceasefire Hopes Push Oil Lower and Boost Risk Appetite

Brent crude dropped 7% after the U.S. and Iran paused attacks around the Strait of Hormuz, boosting equities and DeFi tokens while bitcoin remained near $65,000 ahead of Wednesday’s crucial Federal Reserve decision.

Crypto markets began the week with gains as easing tensions in the Middle East provided some relief for risk-sensitive assets. The temporary halt in U.S.-Iran strikes near the Strait of Hormuz pushed Brent crude prices down from above $100 to roughly $87 per barrel as diplomatic discussions continued.

The shift affected multiple markets. Nasdaq 100 and S&P 500 futures climbed 1.36% and 0.80%, respectively, while gold and silver also advanced as concerns over inflation pressures eased. The CoinDesk 20 Index (CD20) gained 0.1% since midnight UTC and was up 1.6% over the previous 24 hours.

Bitcoin (BTC) traded slightly lower from midnight levels at around $65,200, despite briefly rising to $65,600 when futures markets opened on Sunday. The limited price movement does not fully reflect the broader improvement in investor sentiment.

Ether (ETH) outperformed bitcoin on Monday, rising 0.51% to approximately $1,963 and moving closer to the $2,000 mark for the first time since early June.

The Federal Reserve is set to meet this week and will decide whether to raise interest rates for the first time in three years, with inflation currently at 4.1% following the energy price surge triggered by the Iran conflict.

The easing of geopolitical tensions reduced expectations for a rate hike, with CME Group’s FedWatch tool showing markets now pricing in a 30.5% chance of a move on Wednesday, down from 37.4% at Friday’s close.

Derivatives Market Update

Bitcoin rebound pressures short sellers:
Bitcoin’s recovery above $64,000 since Sunday has forced bearish traders to exit positions. Futures liquidation data showed short positions accounted for the majority of the $312 million in liquidations recorded over 24 hours.

Futures traders remain cautious:
Despite the spot market recovery, futures traders have not fully returned. Open interest declined to around 740,000 BTC after reaching more than 760,000 BTC on Friday. However, positive annualized funding rates and 24-hour cumulative volume delta (CVD) suggest traders are still leaning toward bullish positioning.

ETH derivatives support continued strength:
Ether’s recent outperformance against bitcoin has continued since the June 6 market bottom, with derivatives data reinforcing the trend.

ETH futures open interest increased to 14.66 million ETH, the highest level since June 7. Positive funding rates and ether’s strong OI-adjusted CVD indicate that buyers are driving price action through market orders rather than relying only on passive bids.

Open interest leaders and laggards:
XLM, LTC, and XMR recorded notable increases in open interest, while SHIB and AVAX experienced capital outflows.

Broader market signals remain cautious:
Despite gains in some assets, the wider market continues to show weakness. Only TRX and BNB recorded positive 24-hour CVD readings among major cryptocurrencies, while most large-cap tokens showed negative flows, suggesting broader selling pressure.

Volatility remains subdued:
Bitcoin’s 30-day implied volatility index (BVIV) remained stable near 40%, slightly above its recent two-month low of about 38%, indicating calmer market conditions. Ether’s volatility index (EVIV) showed a similar pattern.

Options market shows reduced downside concerns:
BTC options on Deribit continue to show higher demand for puts compared with calls, reflecting continued interest in downside protection. However, the short-term put-call skew has narrowed to 9% from nearly 13% on Friday, suggesting bearish positioning is easing. ETH options show a much smaller skew, indicating more balanced demand for protection.

Token Market Highlights

DeFi tokens were among Monday’s strongest performers, with Aave (AAVE) climbing 9%, Lido (LDO) gaining 9.4%, and Ondo (ONDO) extending its recent rally with a 7% increase.

Lighter (LIT) recovered after several sessions of profit-taking, rising 4.71% since midnight UTC and 8.91% over 24 hours. The rebound suggests selling pressure may have weakened around the $2.13 level.

PUMP was the day’s top performer, gaining 12% over 24 hours as speculative interest continued to push its market capitalization toward $800 million, up from roughly $570 million two weeks earlier.

Zcash (ZEC) lagged behind other major tokens, declining 1.95% to $497 as the privacy-focused cryptocurrency surrendered some recent gains. Monero (XMR) also fell 1.24% amid broader weakness across the privacy coin sector.

CoinMarketCap’s Altcoin Season Index increased to 55/100, while the average Relative Strength Index (RSI) improved to 51.88, signaling a gradual recovery in overall market sentiment.

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