Bitcoin is trading near $86,000, recovering from its Asia session low while WTI crude drops below $90 and strong equity markets lift investor sentiment.
The largest cryptocurrency was recently changing hands around $86,000 after bouncing back from an Asia session low near $85,000. The price convincingly broke above its May high on Monday, strengthening the bullish trend. The CoinDesk 20 index (CD20) gained 2.2% over 24 hours.
US-listed spot Bitcoin ETFs pulled in nearly $1 billion in inflows on Monday, making it the biggest daily haul since October of last year.
WTI crude futures fell more than 2% to below $90 per barrel, extending the decline from the recent peak of $106. The drop followed a Kyodo report that Iran is willing to reopen the Strait of Hormuz within seven days if the US eases its blockade.
Lower oil prices could help ease inflation pressure and weaken the case for additional Federal Reserve rate hikes in the coming months.
Alex Kuptsikevich, chief market analyst at FxPro, said in an email that crypto markets are strengthening alongside a sharp rise in the Nasdaq index. Falling oil prices and US government bond yields, surging global stock markets, and optimism around US-China negotiations are all supporting risk appetite.
The broader cryptocurrency market also remains strong, with smaller tokens posting solid gains while bitcoin takes a breather. PEPE, DOGE, and SHIB are among the ten best performing cryptocurrencies in the last 24 hours. A sharp rally in memecoins is often seen as a sign of growing speculative appetite.
Derivatives positioning
Futures volume outpaced open interest. Total crypto futures volume jumped 38% to $292 billion over the past 24 hours, while open interest rose only 1% to $157 billion, pushing the volume-to-OI ratio to nearly 2.
Combined with $768 million in liquidations, mostly short positions, this points to a short squeeze rather than new conviction-driven positions entering the market.
Bitcoin open interest edged higher. Open interest in Bitcoin futures keeps climbing alongside the price rally, signaling an increase in long positions. It reached 716,000 BTC, the highest since August 25, though still well below the roughly 750,000 BTC average seen from April through July.
ETH and SOL traders remain reluctant to use leverage. Ether has outperformed bitcoin this quarter, yet its futures open interest continues the downtrend that began in May, a sign that traders are still hesitant to take on leverage. The same pattern applies to SOL.
XRP saw a spike in leverage. XRP open interest rose to 2.46 billion tokens from 2.2 billion in 24 hours, an increase aligned with bitcoin, albeit on a smaller scale.
Whale bias varied by asset. Coinglass data shows that whale bias over the past 24 hours was bearish on XRP, DOGE, and gold, strongly bullish on BTC, and bullish on ETH and SOL. This split helps explain why bitcoin outperformed XRP, DOGE, and gold during the period, although whale positioning is only one of several factors influencing prices.
Cumulative volume delta remained negative across major assets. BTC, ETH, XRP, and SOL each posted negative open interest-adjusted cumulative volume delta over the past 24 hours, meaning aggressive sell-side flows in the futures market outweighed aggressive buy-side flows despite the price increase.
This holds true for most major cryptocurrencies, with TRX being one of the exceptions. It is consistent with the earlier point that the move looks more like short covering pushing prices up than the formation of new conviction-driven long positions.
That said, CVD is a noisy, exchange-dependent metric and should not be analyzed in isolation.
Dogecoin leverage surged notably. DOGE open interest jumped 10% in a day, the biggest rise among the top ten coins. This is worth watching because rising leverage in meme tokens has historically tended to signal speculative froth, a pattern that often appears near local market tops.
Volatility remains contained. Despite the pace of the BTC and ETH rally, the 30-day implied annualized volatility indexes, BVIV and EVIV, are still trading within their recent ranges and remain far below the peaks seen in February and early June, suggesting traders view current conditions as orderly.
The volatility curve flattened as correlation turned positive. According to Laser Digital, the options-based volatility curve has been flattening since last week alongside rising realized volatility and a clear shift in the spot-vol correlation to positive.
Front-end risk reversal swung toward calls, then cooled. Deribit’s front-end risk reversal swung strongly in favor of BTC and ETH calls on Monday evening as bitcoin surged past $85,000, although that call bias has eased slightly since. Calls provide upside exposure to the underlying asset, while puts protect against downside.
The busiest options trades targeted higher strikes. The most active BTC options bets in the past 24 hours were calls at the $95,000 and $90,000 strikes, along with ETH calls covering the $2,500 to $3,000 range.
