Bitcoin dips as Iran war clouds markets; AI tokens outperform

Bitcoin slipped back below $70,000 during European trading after failing to maintain momentum above $71,000, as ongoing geopolitical tensions tied to the Iran conflict kept investors cautious. Despite the broader market’s hesitation, artificial intelligence–focused tokens such as ICP and FET moved higher on strong retail participation.

The world’s largest cryptocurrency, Bitcoin, traded around $69,500 by mid-morning in Europe after losing the gains recorded a day earlier when prices were rejected near $71,750.

Since midnight UTC, bitcoin has fallen about 0.55%. The decline was relatively modest compared with losses seen across several altcoins. Privacy-focused token Zcash dropped roughly 4.5%, while decentralized finance lending protocol Aave slid about 2.1%.

Traditional financial markets were mostly steady. Gold and the U.S. dollar were little changed, while U.S. stock index futures rose about 0.15%.

Geopolitical uncertainty continues to shape market sentiment as tensions involving Iran and Israel persist. Conflicting comments from Donald Trump earlier in the week added to the uncertainty surrounding the conflict.

Oil markets have also been volatile. Crude prices briefly dropped to around $81 per barrel on Tuesday before rebounding to roughly $89 during Wednesday’s European session.

Derivatives positioning

Bitcoin’s inability to push firmly above $70,000 has been costly for traders holding leveraged bullish positions. Over the past 24 hours, more than $220 million in crypto futures positions have been liquidated, with the majority coming from long positions.

Open interest in dollar-denominated bitcoin futures across major exchanges has declined to about 226,000 BTC from 233,000 BTC. The drop suggests traders mostly reduced exposure rather than aggressively shorting the market during the latest pullback. Similar trends are visible in futures linked to Ethereum and Solana.

In contrast, derivatives activity for XRP has been increasing, with open interest climbing to 1.74 billion tokens — the highest level since late February.

Across the wider altcoin market, open interest has generally declined over the past day, indicating capital outflows from several alternative tokens.

However, futures tied to TRON, Conflux and Monero are showing a bullish mix of positive funding rates and rising cumulative volume delta, suggesting active buying interest in derivatives markets. Most other coins show flat or negative funding rates.

Bitcoin’s 30-day implied volatility gauge, BVIV, has declined for three consecutive sessions. Still, its longer-term moving averages — the 50-, 100- and 200-day measures — are aligned in a bullish structure, suggesting volatility may increase in the near future.

A similar pattern is emerging in ether’s volatility metrics. Meanwhile, Wall Street’s widely watched volatility gauge, the CBOE Volatility Index, has climbed about 4% to 26, signaling heightened risk in equity markets that could spill over into digital assets.

On the Chicago Mercantile Exchange, open interest in bitcoin futures has dropped to around $7.39 billion — the lowest level since September 2024. Ether futures activity has also fallen sharply, suggesting institutional interest in the two largest cryptocurrencies remains muted.

Options markets continue to show a defensive tone. On Deribit, protective put options for bitcoin and ether remain more expensive than calls, though demand for downside protection has eased compared with early last month. At decentralized options platform Derive, traders are increasingly positioning for a potential rally above $80,000 while some participants continue selling puts.

Token talk

AI-linked tokens were among the strongest performers in Wednesday’s market.

The token Internet Computer climbed more than 8% after being listed on the South Korean exchange Upbit. Daily trading volume surged from roughly $65 million to about $267 million as retail investors rushed in following the listing.

Another AI-focused project, Fetch.ai, also gained momentum, rising about 6% over the past 24 hours.

Part of the sector’s optimism followed remarks from Jensen Huang, who said in a blog post that artificial intelligence represents a large-scale industrial transformation comparable to the electrification era.

Elsewhere, the broader altcoin market moved lower. DeFi tokens including Curve DAO Token and Jupiter each dropped around 6.5% during the same period.

Despite the mixed performance, sentiment in the digital asset market has started to improve slightly. The Crypto Fear & Greed Index has climbed to 25 out of 100, moving back into the “fear” zone after spending more than a month in “extreme fear.”

The shift reflects the crypto market’s resilience since tensions with Iran intensified, with bitcoin and the broader digital asset sector outperforming both precious metals and U.S. equities since the beginning of March.

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