Bitcoin increases as oil prices surge, while stock markets decline.

Bitcoin increased during European trading hours, even as U.S. equity futures, gold, and silver declined, underscoring its relative strength against oil disruptions and geopolitical tensions.

Bitcoin rose 2.8% as global markets declined amid the Iran conflict (Tudoran Andrei/Shutterstock)

Key points:

• Bitcoin has increased by 2.8% since midnight UTC, while Nasdaq 100 and S&P 500 index futures have fallen by over 1.5%, and oil prices surged to $115 per barrel.
• Gold decreased by 1.6% and silver by 1.1%, weakening the traditional safe-haven narrative as investors shifted towards the U.S. dollar.
• Altcoins and DeFi tokens experienced a surge overnight, with DASH, XMR, and ZEC gaining up to 5.2%, and ETHFI and MORPHO surpassing both BTC and ETH.

Bitcoin BTC$67,783.74 increased by 2.8% since midnight UTC following a decline in global markets when futures trading commenced an hour earlier.

Nasdaq 100 and S&P 500 index futures both fell over 1.5% since midnight as oil prices reached $115 per barrel, the highest since June 2022. Precious metals also faced losses, with gold and silver dropping 1.6% and 1.1% respectively, undermining the safe-haven narrative as investors gravitated towards the U.S. dollar.

In contrast, sentiment towards bitcoin is improving, showing resilience amid the conflict in Iran and the resulting supply disruptions in the Strait of Hormuz.

"Although BTC has not yet fully established its digital gold narrative, its functional role as a digital escape route is becoming increasingly pertinent, especially in Gulf nations, during times of currency volatility and political instability," trading firm QCP noted in a report on Monday.

Derivatives market positioning

• Exchanges have liquidated nearly $400 million in crypto futures positions within 24 hours. Bearish positions in oil were heavily impacted as prices for the commodity rose to $115 per barrel.
• Open interest (OI) in bitcoin futures remains stable near weekly lows at approximately 650K BTC, indicating that the futures market is not engaging in the Monday morning surge. OI in ether futures has climbed to 13 million ether.
• XRP’s OI surged to 1.72 billion tokens, the highest level since February 24, along with a slight increase in SOL OI, both signaling inflows of capital.
• OI in PAXG, AVAX, LTC, and several other alternative tokens has decreased over the past 24 hours. Investors appear to be reducing risk in response to the price rebound.
• The 30-day implied volatility indexes for BTC and ETH remain stable, reflecting market calm despite the turmoil in Asian equity and oil markets.
• On Deribit, bitcoin and ether puts continue to be priced above calls, indicating ongoing concerns about downside risks. However, the premium remains largely unchanged from the previous week, suggesting that the spike in oil prices has not generated a significant increase in demand for protective puts.
• The BTC implied volatility term structure remains in backwardation, indicating that traders are anticipating higher short-term volatility compared to the long term. This aligns with the uncertainties surrounding the conflict.

Token performance

• The altcoin market showed positive movement overnight, with tokens such as DASH, XMR, and ZEC posting gains ranging from 3.8% to 5.2%.
• Decentralized finance (DeFi) tokens also performed favorably. ETHFI and MORPHO have both outpaced bitcoin BTC$67,783.74 and ether (ETH) since midnight.
• CoinMarketCap’s "Altcoin Season" indicator is currently at 36/100, significantly up from February’s low of 22/100. A report from CoinDesk on Friday suggested that the scarcity of altcoin mentions on social media could indicate a bullish sentiment regarding a potential market reversal.
• The top-performing benchmark in the last 24 hours was CoinDesk’s Computing Select Index (CPUS), which includes chainlink LINK$8.7809 and bittensor (TAO), which increased by 2.7%, followed by the CoinDesk Smart Contract Platform Select Index (SCPXC), which rose by 0.92% since Sunday morning.
• Conversely, the institutional-focused token canton (CC) saw a decline of 3.4% in value over the past 24 hours, while WLD$0.3642, the token developed by OpenAI co-founder Sam Altman, decreased by approximately 2%.