Bitcoin surges heavily while oil and geopolitical tensions shake markets

Bitcoin demonstrated remarkable resilience during a turbulent market session, where geopolitical tensions surrounding Iran and the Strait of Hormuz caused massive shifts in investor strategies. While traditional safe-haven assets came under pressure, digital assets like Bitcoin suddenly appeared as alternative protection against market chaos.

Geopolitical turbulence drives markets in different directions

Market reality on Monday morning was mixed. Since midnight UTC, Bitcoin rose by 4.46% to reach $70,940, while futures on the Nasdaq 100 and the S&P 500 index collectively lost more than 1.5%. The most notable was oil prices, which surged to $115 per barrel – the highest since June 2022 – highlighting prominent geopolitical risk premiums.

Traditional precious metals, normally used as safe havens, experienced an unexpected correction. Gold lost 1.6% of its value and silver 1.1%, as investors turned to the US dollar. This pattern indicates a fundamental shift in risk appetite.

“Although Bitcoin has not yet fully realized its digital gold narrative, its practical use as a digital safe haven is becoming increasingly relevant, especially in Gulf states amid periods of currency volatility and political uncertainty,” analyzed the trading firm QCP in a market note. This observation reflects an evolution in Bitcoin’s role, beyond the traditional notion of digital store of value.

Bitcoin shows resilience against traditional safe-haven logic

The question of why Bitcoin outperformed gold and silver offers insight into changing market dynamics. President Donald Trump’s announcement of a five-day pause in attacks on Iranian energy infrastructure seemed to give investors some relief. Bitcoin surged above the $70,000 threshold and maintained most of its gains during this geopolitical pause.

Other cryptocurrencies followed this positive momentum. Ethereum increased by 5.55%, Solana by 7.10%, and Dogecoin by 5.90%. Even more niche projects like ChainLink (+2.7% aggregated performance) and Bittensor (+9.88%) participated in the rally, indicating broad risk appetite returning to the market.

The S&P 500 and Nasdaq recovered somewhat, each gaining about 1.2%, signaling a cautious sentiment recovery in traditional markets as well.

Derivatives market shows mixed signals about future confidence

Trader behavior in derivatives markets adds nuance. Exchanges liquidated nearly $400 million in crypto futures positions within 24 hours – a massive correction by speculators. This suggests not everyone is convinced of the sustainability of the Bitcoin rally.

At the same time, open interest (OI) in Bitcoin futures remains stable near 650,000 BTC – weekly lows – indicating that the futures market is not actively participating in Monday’s rally. Conversely, OI in Ether futures rose to 13 million ETH, indicating capital shifts.

XRP attracted significant attention with open interest rising to 1.72 billion tokens, the highest since February 24. Solana’s OI also showed slight increases, both pointing to net capital inflows into these projects. Conversely, positions in PAXG, AVAX, and LTC were reduced over 24 hours, as investors apparently cut risks after price gains.

The 30-day implied volatility indices for Bitcoin and Ethereum remained notably stable, reflecting market confidence despite chaos in Asian stock and oil markets. On Deribit – the main options trading platform – put options on Bitcoin and Ethereum traded at premiums over call options, indicating ongoing downward concerns. However, the premium size remained largely unchanged week-over-week, suggesting oil prices have not driven excessive demand for defensive positions.

Bitcoin’s implied volatility term structure remained in backwardation, where short-term volatility is priced higher than long-term, consistent with uncertainties around Iran dynamics.

Altcoin season breathes new life into smaller tokens

Last night, alternative tokens experienced a renaissance. Monero, Dash, and Zcash posted gains between 5.51% and 6.03%, notable for tokens usually in the market’s top tier. Ether.fi and Morpho performed remarkably well, both outperforming Bitcoin and Ethereum since midnight.

This pattern is reflected in CoinMarketCap’s “Altcoin Season” indicator, now at 36/100 – significantly higher than the February low of 22/100. Interestingly, CoinDesk last Friday noted that a lack of altcoin mentions on social media could be bullish for a market reversal – which now appears to be unfolding.

The best-performing benchmark index was CoinDesk’s Computing Select Index (CPUS), including Chainlink ($9.16) and Bittensor ($TAO), which gained 2.7%. The Smart Contract Platform Select Index (SCPXC) rose 0.92% since Sunday morning.

On the other hand, Canton (CC) lost 1.44% in 24 hours, while Worldcoin (WLD) from Sam Altman (+8.17%) outperformed initial rumors.

Future outlook: What determines the next move?

Analysts point out that Bitcoin’s next move heavily depends on two critical factors: stabilization of oil prices and normalization of shipping traffic through the Strait of Hormuz.

If achieved, this likely supports a new test of resistance levels around $74,000–$76,000. Deterioration of the geopolitical situation could push prices back toward the mid-$60,000 range.

The broader picture is this: Bitcoin’s evolution from digital gold to a geopolitical hedge asset has accelerated under current conditions. This repositioning – moving away from traditional safe-haven correlation toward practical application in volatile regions – sets a fundamentally new narrative in motion. Altcoins are following this momentum, supported by improved market sentiment and renewed risk appetite among investors.

The coming hours and days will be crucial in determining whether this rally is sustainable or just a temporary relief.