Bitcoin Recovers to $86,000 Amid Falling Oil Prices

Bitcoin has rebounded to around $86,000, supported by declining oil prices and strong stock market performance, indicating a positive risk appetite.

Markets Bitcoin Bounces Back as Oil Prices Decline Boost Risk Appetite

Bitcoin hovers around $86,000 as WTI oil dips below $90, bolstered by strong stock market performance.

By Omkar Godbole, Shaurya Malwa | Edited by Sheldon Reback 1 minute ago 5 min read Make preferred on

Bitcoin has recently traded close to $86,000, recovering from earlier lows of approximately $85,000 during the Asian session. The cryptocurrency's upward movement was supported by a notable drop in WTI crude oil prices, which fell below $90 per barrel, and a strong performance in stock markets.

The CoinDesk 20 Index (CD20) reported a 2.2% increase over a 24-hour period, indicating a bullish trend. On Monday, U.S.-listed spot bitcoin ETFs experienced nearly $1 billion in inflows, marking their largest single-day intake since October of the previous year.

WTI crude futures saw a more than 2% decline, retreating from a recent peak of $106. This decrease followed a report from Kyodo indicating that Iran is open to reopening the Strait of Hormuz within a week if the U.S. eases its blockade.

Falling oil prices may contribute to easing inflationary pressures, potentially reducing the likelihood of further interest rate hikes by the Federal Reserve in the near future.

“The crypto market has gained momentum alongside a sharp increase in the Nasdaq index. The decline in oil prices, along with lower U.S. government bond yields, rising global stock markets, and optimism surrounding U.S.-China negotiations, has bolstered risk appetite,” stated Alex Kuptsikevich, chief market analyst at The FxPro, in an email.

The overall cryptocurrency market remained optimistic, with smaller altcoins experiencing significant gains as Bitcoin consolidated. Notable performers included PEPE, DOGE, and SHIB, which ranked among the top ten cryptocurrencies by performance in the last 24 hours. Surges in memecoins are often interpreted as signals of increased speculative interest.

Derivatives Positioning

Futures volume surpasses open interest: Total crypto futures volume surged 38% to $292 billion in the last 24 hours, while open interest (OI) rose only 1% to $157 billion, resulting in a volume-to-OI ratio nearing 2. This, combined with $768 million in liquidations predominantly from short positions, indicates a short squeeze rather than a strong influx of new long positions.
BTC open interest rises: Bitcoin's futures OI is increasing alongside the price rally, suggesting an accumulation of long positions. The current figure stands at 716,000 BTC, the highest since August 25, yet still below the average of around 750,000 BTC observed from April to July.
ETH and SOL traders remain cautious: Despite Ether's outperformance over Bitcoin this quarter, its futures OI has been on a downward trend since May, reflecting a reluctance among traders to leverage. This trend is similarly seen in SOL.
XRP experiences a leverage increase: XRP's OI increased to 2.46 billion tokens from 2.2 billion within 24 hours, mirroring Bitcoin's upward trend, albeit from a smaller base.
Whale sentiment varies by asset: Data from Coinglass reveals a bearish sentiment among whales for XRP, DOGE, and gold, while displaying extreme bullishness for BTC and bullish outlooks for ETH and SOL. This divergence helps explain Bitcoin's stronger performance compared to XRP, DOGE, and gold during this period, although whale positioning is just one factor influencing price movements.
Cumulative volume delta remains negative across major assets: BTC, ETH, XRP, and SOL all show a negative 24-hour OI-adjusted cumulative volume delta, indicating that aggressive selling in futures has outpaced buying, despite rising prices. This pattern is consistent across most major cryptocurrencies, with TRX being a notable exception. This further supports the notion that the recent price increase is primarily due to short-covering rather than a significant accumulation of new long positions.
Dogecoin's leverage growth stands out: DOGE's OI surged by 10% within a day, marking the largest increase among the top ten cryptocurrencies. This trend warrants attention, as consistent growth in meme-token leverage often indicates speculative excitement, a pattern historically observed near market tops.
Volatility indexes remain stable: Despite the rapid rally of BTC and ETH, the 30-day annualized implied volatility indexes, BVIV and EVIV, are trading within their recent ranges and remain significantly lower than peaks observed in February and early June, suggesting traders view the current market conditions as stable.
Volatility curve flattens as correlations become positive: According to Laser Digital, the options-based volatility curve has been flattening since last week, coinciding with an uptick in realized volatility and a positive correlation with spot prices.
Risk reversals favor calls, then moderate: Deribit's front-end risk reversals swung significantly in favor of BTC and ETH calls late Monday as Bitcoin's price surpassed $85,000, though the call bias has since diminished. Calls provide upside exposure for the underlying asset, while puts protect against declines.
Most active options trades focus on higher strikes: The most active BTC options trades in the past day were calls at the $95,000 and $90,000 strikes, along with ETH calls ranging from $2,500 to $3,000.

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Token Talk

Holders of ZetaChain recently voted to discontinue their blockchain. While forks and abandoned chains are commonplace, a formal vote to cease operations is quite rare.
Launched in 2023 with $27 million in funding, ZetaChain aimed to facilitate cross-chain value transfers without relying on intermediaries.
Three years later, the chain's token, ZETA, currently ranks 313th by market capitalization, valued at around $90 million.
On Sunday, holders approved the proposal to retire the network and transition the ZETA token to Solana, with over 99% voting in favor and a turnout of 58%, surpassing the 40% threshold required.
The rationale for this decision lies in the ongoing operational costs associated with running a blockchain. ZetaChain is built on the Cosmos SDK, which means security flaws in the toolkit also affect ZetaChain, necessitating ongoing maintenance and updates. In August, Cosmos Labs disclosed security breaches across six chains using related software, resulting in approximately $6 million in losses. Although ZetaChain was not affected, it would still have to implement fixes.
Solana was selected due to the developers' work on Anuma, an AI application launched in February. Anuma retains user context across different AI models, boasting over 300,000 users. Moving to Solana allows Anuma to tap into an existing user base without requiring new users to bridge to a lesser-known chain.
Holders will lock their tokens in exchange for credits to use within Anuma, transforming ZETA from a stake in network security to a prepaid app usage model. Traders reacted positively to this change, leading to a doubling of ZETA’s value from roughly 4 cents to 7 cents before falling 16% in 24 hours to just under 6 cents. The trading volume exceeded $117 million against a market cap of $90 million, indicating a high turnover rate.
One final governance vote is required before any transitions can occur.

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Bitcoin Bounces Back as Oil Prices Decline Boost Risk Appetite

Bitcoin hovers around $86,000 as WTI oil dips below $90, bolstered by strong stock market performance.

Derivatives Positioning

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