Yeliz Akmaca 
Volatility has surged again in the crypto markets. Derive.xyz reported an increase in short-term bearish positions primarily in market leaders Bitcoin (BTC) and Ethereum (ETH). With the escalation of the Israel-Iran conflict, investors turned to risk hedging.
However, long-short ratios remained balanced. Analysts predict that the short-term downtrend may remain limited against long-term catalysts. On Monday afternoon, Bitcoin traded around $102,000.
Previously, US missile strikes targeting Iran caused BTC to fall below $99,000. This decline triggered the liquidation of crypto leveraged positions exceeding $1 billion. Sharp drops were also observed in altcoin prices.
Sharp Rise in Short-Term Volatility
Derive.xyz stated that implied volatility (IV) surged rapidly as investors digested new geopolitical risks. According to The Block, one-week IV rose to 45% for Bitcoin and 83% for Ethereum. Afterwards, there was an approximate five-point drop. Derive Research Head Dr. Sean Dawson told The Block, “Volatility markets say this is not over yet.”
Iran’s threat to close the Strait of Hormuz created uncertainty in the markets. However, QCP Capital noted that options traders assessed this scenario as low probability. Coin Bureau founder Nic Puckrin described this possibility as “economic suicide.” According to Puckrin, market participants did not take this threat seriously, and BTC subsequently rose again overnight.
Resilient Market and New Catalysts
Although long-short ratios slightly declined, recovery signals showed increased investor confidence. On Friday, Texas approved a law to create a strategic Bitcoin reserve, becoming the third US state to do so. Michael Saylor’s company made new purchases, while investors like Anthony Pompliano increased their crypto treasury investments. BRN chief analyst Valentin Fournier stated these developments balance both geopolitical risks in the Middle East and macroeconomic fundamentals. Fournier noted, “Long-term structural demand is strengthening.”
Solana is expected to perform better than Ethereum in this recovery phase. Ethereum experienced a short-term loss of institutional support but is predicted to regain value as volatility decreases.
Market Calendar and Expectations
Markets are now focused on two key dates:
- July 9: End of Donald Trump’s 90-day tariff pause
- July 30: Federal Reserve interest rate decision meeting
CME FedWatch data shows investors do not expect rate cuts after Fed Chair Jerome Powell’s hawkish statements in June. QCP Capital emphasized that both the Fed’s decisions and developments in the Middle East could affect crypto prices in either direction.
QCP analysts stated, “The market continues to stay at a turning point,” noting digital assets are moving along a line between risk-taking and risk-aversion.
You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.