Bitcoin BTC$69,558.65 traded at $69,500 mid-morning in Europe after giving up Tuesday's gains following a rejection at $71,750.

The largest cryptocurrency dropped 0.55% since midnight UTC, a loss dwarfed by several altcoins, with zcash (ZEC) and aave AAVE$109.87 falling by 4.5% and 2.1%, respectively.

Gold and the dollar are little changed, while U.S. stock index futures added 0.15%.

The price action is still being dictated by the U.S.-Israel war with Iran, which continues to rage even after conflicting comments from U.S. President Donald Trump on Tuesday.

Oil remained volatile as a result, falling to as low as $81 per barrel on Tuesday before bouncing back to $89 during the European session on Wednesday.

Derivatives positioning

• Bitcoin's failure to build momentum above $70,000 has proved costly for bulls holding leveraged long bets. In the past 24 hours, over $220 million worth of crypto futures bets have been liquidated, with longs accounting for most of the tally.
• Open interest (OI) in dollar-denominated bitcoin futures on major exchanges has declined to 226,000 BTC from 233,000 BTC. This indicates that the overnight price drop hasn't really seen traders short the falling market. The same dynamic is seen in solana (SOL) and ether (ETH) futures.
• Activity in XRP futures continues to grow, with open interest rising to 1.74 billion tokens, the highest since Feb. 23.
• Broadly speaking, OI has decreased in most alternative tokens over the past 24 hours, a sign of renewed capital outflows.
• TRX, CC and XMR stand out with a bullish combination of positive annualized funding rates and cumulative volume delta (CVD), pointing to active buying in the futures market. Most other coins have flat to negative funding rates and CVDs.
• Bitcoin's 30-day implied volatility index, BVIV, fell for a third straight day, but its major averages — the 50-, 100- and 200-day measures — are now stacked one above the other. That's a bullish signal, meaning volatility could pick up.
• The same is true for the ether volatility index. Moreover, Wall Street's VIX index is up 4% at 26%, pointing to elevated volatility in stocks that could spill over into cryptocurrencies.
• On the CME, open interest in BTC futures has dropped to $7.39 billion, the lowest since September 2024, alongside an equally sharp drop in ETH futures. Clearly, institutional appetite for the two tokens remains weak.
• On Deribit, BTC and ETH protective puts continue to trade pricier than calls, although demand for downside protection has weakened notably since early last month. On decentralized exchange Derive, traders are increasingly betting on a rally above $80,000, alongside put selling on Deribit, Derive told CoinDesk.

Token talk

• AI token internet computer (ICP) led a mixed altcoin sector on Wednesday, rising by more than 8% after it was listed on Korean exchange Upbit. Daily trading volume jumped from $65 million to $267 million after the listing as retail investors poured in.
• Continuing the AI theme, FET$0.1588 jumped, notching a 6% gain over the past 24 hours.
• AI's positive performance can be attributed in part to a rare blog post from Nvidia CEO Jensen Huang, who claimed that AI is an industrial buildout comparable to electrification.
• The rest of the altcoin market receded on Wednesday, with decentralized finance (DeFi) tokens curve (CRV) and jupiter (JUP) losing 6.5% apiece in the past 24 hours.
• Crypto sentiment is slowly improving as the Fear and Greed index is at 25/100, moving into "fear" territory after more than a month stuck in the "extreme fear" zone.
• The uptick comes as a result of the crypto market's relative strength since the start of the war in Iran, with bitcoin and the broader market outperforming precious metals and U.S. equities since March 1.