The cryptocurrency market, US stocks and precious metals plunged on Tuesday as the Dollar Index (DXY) rose 0.5% as of midnight UTC to its highest level since January 19.
The risk-averse sentiment comes after the escalation of the conflict in Iran, with Israel launching new attacks on Tehran and Beirut, while the US embassy in Riyadh was hit by two Iranian drones.
Gold hit a one-month high of $5,410 on Monday but fell back to $5,260 on Tuesday as investors turn to the dollar as a safe haven.
bitcoin has been largely correlated with gold this week; It rebounded to $70,000 on Monday before returning to $66,500, firmly in the middle of a range it has occupied since early February.
The altcoin market fared worse than bitcoin, with companies like ADA, ZEC, and DASH losing more than 4% since midnight UTC.
Derivatives positioning
- Market dynamics have moved into a consolidation phase, with BTC futures open interest stabilizing at $15.3 billion as post-leverage cleanup reaches equilibrium. Retail sentiment remains cautiously bullish, with funding rates ranging between 0% and 10%, while institutional conviction has softened slightly, marked by the three-month annualized basis falling just below 3%. This suggests a firm market floor but a temporary plateau in bullish momentum.
- The options market has moved from “panic covering” to sustained optimism, with 24-hour call volume rising to a 63/37 split. The 25-week delta bias has cooled to 14% (down from 27%), indicating a sharp drop in the cost of downside protection. Crucially, the term structure of implied volatility (IV) has become contango, as initial premiums collapse below the stable 49%-50% seen in longer-term terms, indicating that immediate fear has been replaced by medium-term growth expectations.
- Coinglass data shows $392 million in 24-hour liquidations, with a 50-50 split between long and short positions. BTC ($163 million), ETH ($96 million), and Others ($20 million) were the leaders in terms of notional settlements. The Binance settlement heatmap indicates $69,800 as the central settlement level to monitor, in case of a price increase.
symbolic talk
- CoinDesk’s Memecoin (CDMEME) and DeFi Select (DFX) indices are the best performing benchmark indices over the past 24 hours, up 0.95% and 0.71% respectively.
- The AI NEAR token recovered from oversold conditions with a 13.3% bullish move on Tuesday, indicating that parts of the altcoin market remained coiled, ready to jump higher.
- Broadly speaking, however, the altcoin market remains in a consolidation phase as part of a bearish trend dating back to October. Over the past week, companies like PEPE, ATOM, SHIB, and BCH lost double digits even though Bitcoin remained in the middle of its trading range.
- DeFi tokens JUP and MORPHO bucked the consolidation trend, rising 23% and 20% respectively over the past week and continued higher on Tuesday.
