Crypto Market

BTC and ETH Market Insight

The heightened tension between Iran and the U.S. has caught the globe’s attention. The market initially went risk-off as investors exited their positions to sit on cash after U.S. President Donald J. Trump threatened Iran, stating they must either sign the newly drafted ceasefire proposal to find peace or face renewed rounds of strikes on their land. These statements triggered a drop of more than 3% in Bitcoin (BTC), while other altcoins fell roughly 5%. However, a minor relief bounce followed over the weekend due to potential progress on U.S.-Iran diplomatic frameworks. If the war finally ends and the Strait of Hormuz reopens for shipments, it could mitigate rising energy-linked inflation fears.

Meanwhile, Kevin Warsh has been officially named the new Chair of the Fed. Although a large group of people remains optimistic regarding his relationship with the U.S. government and Trump’s stance on rate cuts to aggressively boost economic development, some still view his appointment as a hawkish transition at the Federal Reserve. This sentiment has pushed sovereign bond yields to restrictive highs, weighing down both the broader crypto market and keeping a lid on the S&P 500 and Nasdaq.

Upcoming Macro Calendar - Source: Trading Economics

Options Market

Over the past week, the crypto market remained in cautious consolidation with mild downside pressure. Risk appetite across crypto markets was dampened by renewed concerns over a potential escalation of geopolitical tensions and macro uncertainty as Warsh took charge of the Fed - BTC was sold off to nearly 74k mark and ETH 2k mark. However, the losses were quickly recovered as the market rebounded into a thin liquidity, heading into a long weekend. One-week implied volatility drifted lower for BTC, settling at 32.6% in tandem with realized volatility, while ETH’s 1W IV stayed largely unchanged despite a pickup in realized volatility on the dip. ETF netflows remained negative throughout the week, continuing the outflow trend from the previous week. Put skew moderated for both assets, signaling a reduction in aggressive demand for downside protection.

Altcoins and Blockchain News

Macro

The major benchmarks finished the week higher with solid gains: the DJIA added +2.13%, the S&P 500 edged up +0.88%, and the Nasdaq increased +0.45%. The Chinese stock market retreated for a second consecutive week: the Shanghai Composite Index fell 0.54%, the CSI 300 shed 0.30% and the Hang Seng index lost 1.37%.