Bitcoin holds firm as Strait of Hormuz pause sends oil lower and lifts risk assets

Brent crude fell more than 7% after the U.S. and Iran paused strikes over the Strait of Hormuz, easing inflation fears and supporting equities, DeFi tokens and other risk assets as bitcoin traded near $65,000 ahead of Wednesday’s Federal Reserve decision.

The U.S. and Iran paused strikes over the Strait of Hormuz, sending Brent crude down more than 7% to about $87 a barrel and easing inflation concerns that have pressured risk assets for weeks.

The move came as the Federal Reserve prepares to meet this week on whether to raise interest rates for the first time in three years, with inflation near 4.1%. Following the pause in hostilities, markets trimmed the probability of a rate increase to 30.5% from 37.4% at Friday’s close, according to CME Group’s FedWatch tool.

The shift in the Middle East helped the crypto market open the week with a firmer tone, underscoring how quickly energy prices can feed into expectations for inflation and central bank policy. As mediators continued talks, Brent crude fell from above $100 to around $87 per barrel. The move was reflected across several asset classes: Nasdaq 100 futures were up 1.36%, S&P 500 futures rose 0.80%, and gold and silver were also higher as inflation fears eased.

The CoinDesk 20 Index (CD20) gained 0.1% since midnight UTC and 1.6% over the past 24 hours.

Bitcoin BTC $63,566.12 was lower since midnight at $65,200, although that followed a brief rise to $65,600 at the start of futures trading on Sunday. The largely unchanged reading masked a clearer improvement in sentiment, with traders also watching whether the calmer oil backdrop and the Fed meeting would keep cross-asset risk appetite intact.

Ether (ETH) outperformed bitcoin on Monday, rising 0.51% to $1,963 and moving closer to the psychologically important $2,000 level for the first time since the beginning of June.

Derivatives positioning

Bears absorbed most of the damage as bitcoin rebounded on Sunday, pushing the spot price back above $64,000. Futures liquidation data showed that forced closures of short, or bearish, positions made up most of the $312 million in 24-hour liquidations.

Futures traders have not fully joined the spot-market bounce. Open interest fell to 740,000 BTC from Friday’s spike above 760,000 BTC. Even so, annualized funding rates and the 24-hour cumulative volume delta (CVD) remained positive, which may indicate a bullish bias in positioning.

Ether futures also confirmed ETH’s outperformance. The trend has extended from the June 6 market bottom, and futures data appears to support the price action.

Open interest in ETH futures climbed to 14.66 million ETH, the highest level since June 7. Funding rates remained positive, and ether’s 24-hour OI-adjusted CVD was the most positive among major cryptocurrencies, suggesting bulls may be driving price action through market orders rather than passive limit orders.

Other notable open interest gainers included XLM, LTC and XMR, while SHIB and AVAX saw capital outflows.

The broader market still looked bearish. Only TRX and BNB also showed positive 24-hour CVDs, while the rest of the majors posted negative readings, which may point to bearish leadership elsewhere in the market.

Volatility indicators were comparatively calm. Bitcoin’s 30-day implied volatility index, BVIV, held near 40%, just above the recent two-month low of about 38%, while Ether’s EVIV showed a similar pattern.

In Deribit-listed options, BTC puts continued to trade above calls, pointing to ongoing demand for downside protection. However, the bias at the front end appeared to be easing, with the one-week put-call skew at 9% versus nearly 13% on Friday. ETH skew was much lower than BTC’s, indicating more measured demand for downside protection in ether.

Token talk

DeFi tokens were the standout performers on Monday. AAVE rose 9%, LDO $0.3868 gained 9.4% over the past 24 hours, and Ondo ONDO $0.3935 extended its recent advance with a 7% gain.

Lighter (LIT) also recovered, rising 4.71% since midnight UTC and 8.91% over 24 hours after several sessions of profit-taking. The move suggested sellers may have exhausted themselves in the $2.13 area, with the token attempting to rebuild.

PUMP $0.002072 was Monday’s strongest performer, up 12% over 24 hours. The token has continued to attract speculative interest, pushing its market capitalization toward $800 million from $570 million two weeks ago.

Zcash (ZEC) lagged its peers, falling 1.95% to $497 as the privacy coin gave back some recent gains. Rival Monero (XMR) declined 1.24% in a broader sector pullback.

CoinMarketCap’s Altcoin Season indicator rose to 55 out of 100, while the average relative strength index (RSI) recovered to 51.88, both suggesting that sentiment in the market is gradually improving.

Crypto Flows, Share and the Selective Rotation

Markets have repositioned since June, but Binance held share at roughly 55% of user funds and about 24% of spot volume, while drawing net inflows in early July even as the tracked market saw outflows.