Bitcoin slips amid Iran war uncertainty as AI tokens surge

Bitcoin slipped below $70,000 in European trading hours after failing to sustain momentum above $71,000, as geopolitical tensions tied to the Iran conflict kept investors cautious. Meanwhile, artificial intelligence–linked tokens such as ICP and FET bucked the broader market trend, climbing on strong retail demand.

The largest cryptocurrency, Bitcoin, was changing hands near $69,500 by mid-morning in Europe after surrendering gains from the previous session following a rejection around $71,750.

Since midnight UTC, bitcoin declined roughly 0.55%. The pullback was modest compared with losses in several altcoins. Privacy coin Zcash dropped about 4.5%, while the DeFi lending token Aave fell roughly 2.1%.

Traditional markets showed little movement. Gold and the U.S. dollar remained largely unchanged, while U.S. equity index futures edged about 0.15% higher.

Market sentiment continues to be shaped by the ongoing conflict involving Iran and Israel, which has injected uncertainty across global markets. Mixed messaging from Donald Trump on Tuesday added to the volatility.

Oil prices also swung sharply. Crude slid toward $81 per barrel on Tuesday before rebounding to around $89 during Wednesday’s European session.

Derivatives positioning

Bitcoin’s inability to build momentum above the $70,000 level has triggered losses for leveraged bullish traders. Over the past 24 hours, more than $220 million in crypto futures positions were liquidated, with long positions accounting for the majority.

Open interest in dollar-denominated bitcoin futures across major exchanges dropped to about 226,000 BTC from 233,000 BTC. The decline suggests traders largely closed positions rather than aggressively shorting the market during the overnight drop. A similar pattern has appeared in futures tied to Ethereum and Solana.

By contrast, activity in XRP derivatives has been increasing. Open interest in XRP futures climbed to 1.74 billion tokens, marking the highest level since Feb. 23.

Across the broader altcoin market, open interest has generally declined over the past day, signaling capital outflows from riskier tokens.

A few exceptions stand out. Futures tied to TRON, Conflux and Monero show positive funding rates and rising cumulative volume delta (CVD), suggesting active buying in derivatives markets. Most other coins are seeing flat or negative funding rates.

Bitcoin’s 30-day implied volatility gauge, BVIV, declined for a third straight day. However, its longer-term moving averages — the 50-, 100-, and 200-day measures — are now stacked in a bullish configuration, indicating volatility could rise in the near term.

The same pattern is visible in ether’s volatility metrics. Meanwhile, the equity market’s volatility gauge, the CBOE Volatility Index, has climbed about 4% to 26, pointing to heightened risk across financial markets that could spill over into crypto.

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

Options markets show a similar defensive tone. On Deribit, protective puts for bitcoin and ether still command higher premiums than call options, although demand for downside hedging has eased since early last month. Traders on the decentralized options platform Derive are increasingly positioning for a potential rally above $80,000, while some participants continue selling puts.

Token talk

AI-related tokens were among the few bright spots in Wednesday’s market.

The AI-linked token Internet Computer jumped more than 8% after securing a listing on the Korean exchange Upbit. Daily trading volume surged from about $65 million to $267 million as retail investors piled in following the listing.

Another AI-themed token, Fetch.ai, also rallied, gaining roughly 6% over the past 24 hours.

Part of the sector’s momentum was fueled by comments from Jensen Huang, who wrote in a rare blog post that artificial intelligence represents an industrial transformation comparable to electrification.

Elsewhere in the altcoin market, losses dominated. DeFi tokens such as Curve DAO Token and Jupiter each slid about 6.5% over the same period.

Despite the mixed performance, overall crypto sentiment has shown signs of improvement. 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 market’s relative resilience since the Iran conflict intensified. Since March 1, bitcoin and the broader crypto market have outperformed both precious metals and U.S. equities.