Bitcoin declines amid uncertainty over Iran conflict, while AI tokens rise.

BTC hovered around $69,500 after failing to maintain $71,000 as the conflict in Iran caused market apprehension. AI tokens such as ICP and FET showed strong performance driven by retail interest.

AI tokens rise (Sumaid pal Singh Bakshi/Unsplash modified by CoinDesk)

What to know:

• Bitcoin retraced to $69,500 during European trading hours after failing to break through $71,750 as geopolitical issues led to cautious market behavior.
• Most altcoins lagged behind, with zcash (ZEC) declining 4.5% and aave (AAVE) down 2.1% since midnight UTC, while DeFi tokens curve (CRV) and jupiter (JUP) each saw a drop of approximately 6.5%.
• Conversely, AI tokens gained traction, with internet computer (ICP) surging over 8% following its listing on Upbit. FET climbed 6% amid optimistic remarks from Nvidia CEO Jensen Huang.

Bitcoin BTC$69,591.78 was priced at $69,500 in mid-morning Europe after losing Tuesday’s advances following a rejection at $71,750.

The leading cryptocurrency experienced a decline of 0.55% since midnight UTC, a decrease overshadowed by various altcoins, as zcash (ZEC) and aave AAVE$110.27 fell by 4.5% and 2.1%, respectively.

Gold and the dollar remained relatively stable, while U.S. stock index futures rose by 0.15%.

The current price movements are still influenced by the ongoing U.S.-Israel conflict with Iran, which persists despite conflicting statements from U.S. President Donald Trump on Tuesday.

Oil prices remained volatile, dropping to as low as $81 per barrel on Tuesday, then recovering to $89 during the European trading session on Wednesday.

Derivatives positioning

• Bitcoin’s inability to gain traction above $70,000 has been detrimental for bulls holding leveraged long positions. In the last 24 hours, over $220 million in crypto futures positions have been liquidated, with long positions comprising the majority of this figure.
• Open interest (OI) in dollar-denominated bitcoin futures on major exchanges has decreased to 226,000 BTC from 233,000 BTC, indicating that the recent price drop has not prompted traders to short the declining market. A similar trend is observed in solana (SOL) and ether (ETH) futures.
• Interest in XRP futures continues to expand, with open interest climbing to 1.74 billion tokens, the highest level since February 23.
• Overall, OI has fallen across most alternative tokens in the past 24 hours, signaling renewed capital outflows.
• TRX, CC, and XMR exhibit a strong bullish combination of positive annualized funding rates and cumulative volume delta (CVD), suggesting active buying in the futures market. Most other cryptocurrencies display flat to negative funding rates and CVDs.
• Bitcoin’s 30-day implied volatility index, BVIV, has decreased for a third consecutive day, yet its major averages—the 50-, 100-, and 200-day measures—are now aligned one above the other. This alignment is considered a bullish indicator, suggesting potential increases in volatility.
• Similarly, the ether volatility index exhibits a comparable trend. Additionally, Wall Street’s VIX index has risen by 4% to 26%, indicating heightened volatility in stocks that may extend to cryptocurrencies.
• On the CME, open interest in BTC futures has fallen to $7.39 billion, the lowest level since September 2024, alongside a significant decline in ETH futures. Clearly, institutional interest in these two tokens remains subdued.
• On Deribit, BTC and ETH protective puts are trading at a premium compared to calls, although demand for downside protection has significantly decreased since early last month. On decentralized exchange Derive, traders are increasingly speculating on a rally above $80,000, in conjunction with put selling on Deribit, as reported by Derive to CoinDesk.

Token talk

• The AI token internet computer (ICP) spearheaded a varied altcoin market on Wednesday, rising by over 8% after being listed on the Korean exchange Upbit. Daily trading volume surged from $65 million to $267 million following the listing as retail investors entered the market.
• Continuing with the AI narrative, FET$0.1603 experienced a 6% increase over the past 24 hours.
• The favorable performance of AI tokens can be partly attributed to an unusual blog post from Nvidia CEO Jensen Huang, who stated that AI represents an industrial expansion akin to electrification.
• The remainder of the altcoin market declined on Wednesday, with decentralized finance (DeFi) tokens curve (CRV) and jupiter (JUP) each losing 6.5% in the last 24 hours.
• Crypto market sentiment is gradually improving, as the Fear and Greed index sits at 25/100, entering “fear” territory after being entrenched in the “extreme fear” zone for over a month.
• This uptick is attributed to the crypto market’s relative strength since the onset of the conflict in Iran, with bitcoin and the overall market outperforming precious metals and U.S. equities since March 1.