Iran Tensions Ease, Oil Slides and Crypto Finds Support Amid Renewed Investor Optimism

Brent crude fell 7% after the U.S. and Iran paused military actions near the Strait of Hormuz, sparking a broader risk-on move that lifted equities and DeFi tokens. Bitcoin remained steady around $65,000 as markets looked ahead to Wednesday’s Federal Reserve decision.

Crypto markets began the week with renewed optimism as easing geopolitical tensions offered support to risk assets. The temporary halt in U.S.-Iran strikes around the Strait of Hormuz sent Brent crude sliding from above $100 to approximately $87 per barrel as diplomatic discussions continued.

The market shift was visible across several asset classes. Nasdaq 100 and S&P 500 futures climbed 1.36% and 0.80%, respectively, while gold and silver moved higher as concerns over energy-driven inflation eased. The CoinDesk 20 Index (CD20) gained 0.1% since midnight UTC and increased 1.6% over the past 24 hours.

Bitcoin (BTC) traded near $65,200, slightly below its midnight level, after briefly reaching $65,600 following the opening of futures trading on Sunday. While the price movement was modest, improving market sentiment pointed to stronger underlying demand.

Ether (ETH) continued to outperform bitcoin, rising 0.51% to around $1,963 and approaching the $2,000 threshold for the first time since early June.

The Federal Reserve’s upcoming meeting remains the central focus for investors, with policymakers considering whether to raise interest rates for the first time in three years. Inflation has risen to 4.1% following the jump in oil prices caused by the Iran conflict.

However, falling crude prices have lowered the likelihood of a rate hike. CME Group’s FedWatch tool now shows markets assigning a 30.5% probability to a rate increase on Wednesday, down from 37.4% at Friday’s close.

Derivatives Market Analysis

Bitcoin recovery pressures short sellers:
Bitcoin’s return above $64,000 has created losses for bearish traders. Futures data showed that short positions accounted for the majority of the $312 million in liquidations recorded over the past day.

Futures traders remain cautious despite rebound:
Although spot bitcoin prices recovered, derivatives traders have not significantly increased exposure. Bitcoin futures open interest declined to roughly 740,000 BTC after reaching above 760,000 BTC on Friday. Still, positive funding rates and a positive 24-hour cumulative volume delta (CVD) indicate that market participants continue to maintain a bullish outlook.

ETH futures confirm stronger momentum:
Ether’s continued outperformance against bitcoin since the June 6 market low has been supported by derivatives activity.

ETH futures open interest increased to 14.66 million ETH, marking the highest level since June 7. Positive funding rates and strong OI-adjusted CVD data suggest buyers are actively driving the market through executed trades.

Open interest shifts:
XLM, LTC, and XMR recorded notable growth in open interest, while SHIB and AVAX experienced withdrawals of capital from their derivatives markets.

Broader market signals remain mixed:
Despite gains in select cryptocurrencies, overall market momentum remains cautious. Among major assets, only TRX and BNB posted positive 24-hour CVD readings, while most large-cap tokens recorded negative flows, pointing to continued selling pressure.

Volatility indicators remain stable:
Bitcoin’s 30-day implied volatility index (BVIV) stayed around 40%, slightly above its recent two-month low near 38%, suggesting relatively calm market conditions. Ether’s implied volatility index (EVIV) showed a similar trend.

Options market shows reduced bearish pressure:
BTC options on Deribit continue to show greater demand for puts than calls, indicating investors are still seeking downside protection. However, the one-week put-call skew narrowed to 9% from nearly 13% on Friday, suggesting bearish positioning is gradually declining. ETH options show a smaller skew, reflecting more balanced expectations among traders.

Token Market Performance

DeFi tokens led Monday’s gains, with Aave (AAVE) climbing 9%, Lido (LDO) advancing 9.4%, and Ondo (ONDO) rising 7% as the sector continued its recent strength.

Lighter (LIT) recovered after several sessions of profit-taking, gaining 4.71% since midnight UTC and 8.91% over 24 hours. The rebound indicates that selling pressure may have weakened around the $2.13 price level.

PUMP emerged as the day’s strongest performer, increasing 12% over 24 hours as speculative interest pushed its market capitalization toward $800 million, compared with roughly $570 million two weeks earlier.

Zcash (ZEC) underperformed other major cryptocurrencies, dropping 1.95% to $497 as the privacy-focused token gave back some of its recent gains. Monero (XMR) also declined 1.24% amid broader weakness across privacy-oriented assets.

CoinMarketCap’s Altcoin Season Index improved to 55/100, while the average Relative Strength Index (RSI) rose to 51.88, signaling a gradual recovery in overall crypto market sentiment.