Bitcoin Recovers Losses as Falling Crude Prices Lift Risk Appetite

Bitcoin remained close to $86,000 after recovering from an Asian-session decline toward $85,000, as weaker oil prices and gains across equities encouraged renewed appetite for risk.

BTC traded around $86,008.15 after extending its recovery above the May high on Monday. The move strengthened the recent upward trend, while the CoinDesk 20 Index advanced 2.2% over 24 hours.

Investor demand through regulated products also strengthened. U.S.-listed spot bitcoin ETFs recorded almost $1 billion of net inflows Monday, their largest one-day inflow since October last year.

WTI crude futures dropped more than 2% to below $90 a barrel, continuing a retreat from a recent peak of $106. The decline came after Kyodo reported that Iran was prepared to reopen the Strait of Hormuz within seven days if the U.S. relaxed its blockade.

Cheaper oil could reduce inflationary pressure and potentially lessen the need for additional Federal Reserve rate increases in the months ahead. Falling energy prices, alongside stronger equities, have therefore provided another supportive factor for cryptocurrencies.

Alex Kuptsikevich, chief market analyst at FxPro, said the crypto advance was helped by the Nasdaq, lower oil prices, softer U.S. government bond yields, stronger global stocks and optimism surrounding U.S.-China negotiations.

The improvement in risk appetite was also reflected in smaller tokens. PEPE, DOGE and SHIB ranked among the top 10 performers over the past 24 hours, with the strength in memecoins pointing to greater willingness among traders to take speculative positions.

Short Sellers Drive Much of the Move

Crypto futures activity increased sharply, but the rise in open interest was comparatively limited. Aggregate futures volume climbed 38% to $292 billion over 24 hours, while open interest rose 1% to $157 billion.

Liquidations totaled about $768 million, with shorts making up the majority. The combination of heavy futures turnover and modest OI growth indicates that forced short covering played a significant role in the latest price advance.

Bitcoin futures open interest reached 716,000 BTC, the highest level since Aug. 25. Even so, it remains below the roughly 750,000 BTC average seen between April and July.

Leverage demand has been weaker in ether and Solana markets. Although ETH has outperformed bitcoin this quarter, its futures OI has continued declining since May. Solana has experienced a similar reduction in open interest.

XRP has bucked that trend, with futures OI increasing to 2.46 billion tokens from 2.2 billion in just 24 hours.

Whale positioning also differs considerably between major assets. CoinGlass data showed bearish whale bias for XRP, DOGE and gold over 24 hours, while BTC registered an extremely bullish reading and ETH and SOL were classified as bullish. The metric represents only one part of overall market positioning.

Open-interest-adjusted CVD remained negative for BTC, ETH, XRP and SOL, showing that aggressive futures selling continued to exceed aggressive buying despite rising prices. Most major assets displayed comparable readings, with TRX an exception.

That divergence between price and aggressive futures flow is consistent with short covering contributing to the rally. CVD remains exchange-dependent and volatile, however, so the indicator alone does not establish a market trend.

Dogecoin posted the sharpest increase in open interest among the top 10 cryptocurrencies, rising 10% over 24 hours. The jump indicates increasing leverage around DOGE at a time when speculative activity is expanding across meme tokens.

Volatility expectations have not risen at the same pace. BVIV and EVIV, which measure 30-day annualized implied volatility, remain within their recent ranges and well below peaks recorded in February and early June.

Laser Digital said the options volatility curve has flattened since last week as realized volatility increased and the correlation between spot prices and volatility strengthened.

Deribit’s front-end risk reversals shifted toward BTC and ETH calls late Monday as bitcoin moved above $85,000, although the bullish options bias later moderated.

Bitcoin options with $90,000 and $95,000 strikes were among the most actively traded over the previous 24 hours. Ether options activity was concentrated around calls between $2,500 and $3,000.

ZetaChain Moves Closer to Solana

ZetaChain tokenholders have approved a proposal to retire the project’s blockchain and migrate ZETA to Solana, with another governance vote still required before the plan can proceed.

The blockchain launched in 2023 after raising $27 million and was built to facilitate movement of value between different networks. ZETA has a market value of about $90 million and ranks around No. 313.

Sunday’s proposal received more than 99% support from voters, with 58% turnout compared with the 40% threshold required for approval.

Developers cited the expense of operating and securing a separate blockchain as a key reason for the proposed shutdown. ZetaChain was built with the Cosmos SDK, meaning vulnerabilities in shared components can require coordinated fixes among multiple independent networks.

Cosmos Labs disclosed attacks in August involving six chains that used related software, resulting in roughly $6 million in stolen funds. ZetaChain was not among the networks attacked.

The planned Solana migration is closely linked to Anuma, an AI application launched by ZetaChain’s developers in February. Anuma is designed to retain context across multiple AI models, and its developers claim it has more than 300,000 users.

Solana offers an established ecosystem of users, wallets and exchange support, allowing Anuma to reach those users without requiring them to bridge assets to a smaller standalone network.

Under the proposed structure, ZETA holders would lock their tokens to receive credits for use within Anuma. The change would move the token’s function away from securing the blockchain and toward prepaid application access.

ZETA initially climbed from about 4 cents to 7 cents around the governance vote but later reversed sharply. The token was recently down 16% over 24 hours at just below 6 cents.

Trading volume reached approximately $117 million against a market capitalization of around $90 million, meaning more than the token’s entire market value changed hands during the day.