The cryptocurrency market started the week with an increase. Bitcoin recorded a 2.1 percent increase from the early hours of the day, while ether price increased by 3.1 percent. Particularly stronger increases were seen in the altcoin market. Some tokens, such as chiliz and optimism, gained over 6 percent in value.
Geopolitical developments had an impact on the market
Despite the optimism in the markets, investors maintained their cautious stance as the conflict with Iran entered its fifth week. Although Pakistan announced that it was ready to mediate peace talks, financial markets did not have full confidence in these developments. Over the weekend, the Brent oil price rose to $108; It was noted that this level was well above the pre-conflict level of around $70.
US stock index futures responded positively to Pakistan’s statements. Nasdaq 100 and S&P 500 futures rose 0.25 percent. The dollar index remained stable at 100.2 points.
Looking at the broader time frame, the downward structure in the crypto market continues. Lower highs and lows have been noticeable since October. Bitcoin has been moving sideways between $75,000 and $62,800 since the beginning of February.
Volatility dynamics with futures trading
Growth in Bitcoin futures open interest has stalled after reaching a two-month high. As of the weekend, there was an increase in the open position, reaching 748.65 BTC; However, the fact that funding rates are close to zero and negative values in 24-hour volume indicate that the short position trend continues.
After the Bitcoin price fell to $65,000 in the Asian session, there was a decrease in futures open positions due to the rise due to the spot demand. This situation reflects that the increase is mainly due to spot transactions and that leveraged investors do not yet have confidence. BTC/USD long positions on Bitfinex have reached the highest level since November 2023. Historically, this increase has preceded significant sales.
There has been no significant change in futures open interest for leading cryptocurrencies such as XRP, ETH, DOGE and SOL in the last 24 hours. However, open interest in AVAX and LTC grew by double digits. It is understood from the negative volume data that the majority of capital inflows here are related to short-term transactions.
Bitcoin’s 30-day volatility index decreased again and fell to 55 percent. By the end of the week, this rate had risen to 58 percent. The index continued to indicate relative calm in the crypto market, despite Iran-related fluctuations in traditional markets. A similar picture was observed in volatility indicators for Ether.
The fact that put options for both bitcoin and ether on the Deribit platform remain more expensive than call options in all maturities shows that downward expectations continue in the market. Negative gamma balance between 65,000 and 70,000 dollars may support a horizontal course of prices.
On Monday, the CoinDesk Memecoin Index and DeFi Select Index showed leading performances. The increase in both indices was over 2 percent. The Bitcoin-weighted CoinDesk 20 index increased by 1.5 percent.
The movement in the altcoin market was driven by decreased liquidity in general. In the sharp decline experienced on Friday, supply in the stock markets exceeded demand and many assets became “oversold”. This triggered today’s recovery trend.
