The crypto market exhibited signs of volatility on Tuesday, with bitcoin BTC$66,309.07 spiking to $68,300 shortly after midnight UTC before tumbling back to $66,500.
The initial spike was spurred by reports that U.S. President Donald Trump was willing to end the war in Iran without the Strait of Hormuz being opened. The optimism faded after Israeli officials said they were prepared to “keep operating for weeks to come.”
The war, now in its 32nd day, has sent energy prices surging, with Brent crude trading around $107 per barrel, leading to inflation concerns and widespread risk-off sentiment.
Crypto, while being relatively resilient throughout March, is beginning to show signs of weakness after bitcoin failed to rise above $75,000 on two occasions.
U.S. equities diverged from the crypto market on Tuesday, with Nasdaq 100 and S&P 500 index futures both adding 0.8%.
Derivatives Positioning
- Cumulative industry-wide crypto futures open interest (OI) dropped over 3% to $103.79 billion in 24 hours, continuing the risk-off trends observed throughout the first quarter. The tally has declined by over 18% since the start of the year.
- OI has declined across BTC, ETH, SOL, and XRP futures, indicating capital outflows from the major cryptocurrencies. Other tokens, such as BCH, AVAX and LTC, have seen double-digit percentage declines in open interest.
- Privacy-focused ZEC stands out, with its futures market exhibiting bullishness. The token’s OI rose more than 3% alongside mildly positive funding rates and cumulative volume delta. This combination points to an increasing demand for bullish exposure.
- At the other end is DOGE, which has the most negative 24-hour cumulative volume delta among major tokens.
- Bitcoin’s 30-day implied volatility index, BVIV, has ticked up to 58% from 54% late last week, topping its 50-day average to suggest more gains ahead. This means potential for increased price turbulence.
- Ether’s volatility index remains dead flat between 70% and 80% for the seventh straight day.
- On Deribit, bitcoin risk reversals out to the June end expiry show a strong bias for put options. These downside hedges trade at an 8 to 10 volatility-point premium to calls. Meanwhile, bearishness is relatively measured in ether.
- The $60,000 bitcoin put remains the most popular play with a total open interest of $1.50 billion.
Token talk
- The altcoin market suffered more than bitcoin on Tuesday, with tokens like NEO, HBAR and PUMP losing between 2.6% and 3.3% since midnight UTC.
- A select few tokens are bucking that trend, including BCH and AI-related coins, which are in the black.
- CoinMarketCap’s “Altcoin Season” indicator is currently printing 51/100, reflecting relative strength over the past few weeks in spite of Tuesday’s selloff.
- However, the next major move will still be determined by bitcoin and whether it can either break above $75,000 or below $62,000. Altcoins typically perform well when bitcoin consolidates, but lose ground during big swings.
Source: https://www.coindesk.com/markets/2026/03/31/bearish-sentiment-builds-in-crypto-as-volatility-and-hedging-rise
