BTC Pulls Back From Recent Highs as Traders Brace for Renewed Volatility

Bitcoin and the wider crypto market retreated as traders booked profits after BTC reached a monthly high, while renewed geopolitical tensions involving Iran and U.S. military targets intensified selling pressure. Most digital assets moved lower as bears regained control.

Bitcoin declined 1.1% and ether dropped 1.7% since midnight UTC as market momentum weakened.

The correction followed bitcoin’s climb to $65,500 on Wednesday, its highest level of the month, prompting some investors to take profits after the recent rebound.

Several altcoins also reversed gains, with PUMP and ZEC both falling 4.4% as their previous rallies lost steam. The move reflected thin liquidity and uncertainty among traders.

Traditional markets also faced pressure, with Nasdaq 100 futures slipping 0.25% and continuing a downward trend that has developed over the past month.

The conflict in the Middle East remained a key factor influencing investor sentiment. Iran launched attacks against U.S. military bases in Gulf countries on Thursday, while the U.S. maintained its airstrike campaign, keeping risk appetite subdued across financial markets.

Futures Data Shows Traders Cutting Exposure

Ether’s decline was slightly larger than bitcoin’s, but analysts suggested the weakness was mainly caused by the unwinding of bullish positions rather than a significant increase in new short trades.

Ether futures open interest declined to 14.35 million ETH from Wednesday’s five-week peak of 14.45 million ETH, indicating traders were reducing leveraged exposure. Similar trends appeared in bitcoin derivatives markets.

XRP open interest climbed to 2.21 billion XRP, its highest level in 10 days, despite a 0.6% decline in the spot price. The increase may suggest traders are building bearish positions, although positive funding rates show that bullish positions remain active.

The token’s 24-hour cumulative volume delta (CVD) turned negative, suggesting that short sellers are entering trades aggressively through market orders rather than waiting for lower-priced bids.

SUI also saw stronger derivatives activity, with open interest rising 15%. However, total open interest at 654 million tokens remains close to recent levels. The token price fell nearly 2% over the past 24 hours.

Across the broader market, most cryptocurrencies excluding bitcoin, ether, and Monero recorded negative open-interest-adjusted CVD figures, indicating sellers are currently dominating trading activity.

Bitcoin’s 30-day implied volatility increased 2% to 38%. Historically, volatility readings below 40% have often preceded periods of increased market swings.

Options traders continued positioning for a potential upside move. Deribit data showed increased activity in bitcoin call options with $70,000 and $72,000 strike prices, likely linked to a bullish call spread targeting a move toward $72,000 by the end of July.

For ether, the most actively traded bullish option over the last 24 hours was a July-expiry call with a $2,300 strike price.

Altcoins Follow Bitcoin Lower

MORPHO was one of the few tokens to gain ground, rising 3.5% since midnight as it attempted to challenge the $2.20 resistance level. The token previously failed to break above that area on July 2, which led to a drop toward $1.85.

Most major altcoins tracked bitcoin and ether lower. HYPE, SOL, and ENA declined between 1.3% and 1.8%, while NEAR, JUP, and DASH suffered sharper losses.

CoinMarketCap’s Altcoin Season Index remained range-bound at 48 out of 100 after dropping from 58 earlier in the week as investors shifted their focus back to bitcoin.

Memecoins remained an area of activity, especially those launched on Robinhood’s blockchain. Cashcat (CASHCAT) surged from an unknown token to a $220 million market capitalization during the first week after Robinhood Chain launched.

However, the token has since fallen to around a $91 million market cap, even while maintaining approximately $60 million in daily trading volume.