Rising geopolitical tensions, particularly the ongoing conflict between Iran and the United States, have unsettled cryptocurrency markets and caused investors to retreat from risk-taking positions.
CryptoQuant analyst Darkfost noted on Monday that periods like this are typically unfavorable for risk appetite, and this trend is evident in the sharp decline of Bitcoin’s Estimated Leverage Ratio on Binance. This metric gauges the degree to which investors use leverage by comparing futures open interest with the amount of BTC reserves held on the exchange. Since February, the ratio has fallen significantly from 0.198 to 0.152, coinciding with Bitcoin’s decline from $96,000 to $69,000.
Signs of a Healthier Market Structure
Darkfost explained that if the leverage ratio remains low while Bitcoin consolidates, it could indicate that spot market buying, rather than leveraged speculation, is becoming the primary driver of price movements. This shift is generally considered a healthier market dynamic because it reduces systemic risk and stabilizes price action ahead of any new directional trend. Lower leverage typically means that the market experiences less artificial pressure from futures trading, which can prevent exaggerated swings and provide a foundation for more sustainable growth.
In a separate observation, CryptoQuant analyst “IT tech” highlighted that market participants calling for a bottom are increasing in number. One metric, the long-term holder to short-term holder SOPR ratio, has now recorded 29 consecutive days in distress territory and currently sits at 0.89. The analyst noted that while recent buyers are underwater and short-term holders are beginning to capitulate, long-term holders are neither selling nor absorbing new supply. This suggests that while short-term selling is building, it has not yet reached extreme levels, and declaring a structural low in Bitcoin would be premature.
At the same time, Glassnode reported on Monday that momentum has shown modest improvement. The relative strength index has lifted from recent lows, indicating some recovery, but price action still lacks the strength needed to confirm a decisive bullish reversal. Spot market activity remains subdued, with lower trading volumes reflecting softer participation even as conditions gradually begin to stabilize.
Crypto Market Outlook
Spot cryptocurrency markets have seen gains of approximately 4.3 percent on the day, bringing the total market capitalization to $2.46 trillion. This movement followed remarks from former US President Donald Trump, who suggested that the conflict with Iran could be “over soon.” Bitcoin reclaimed the $70,000 level during early trading in Asian markets on Tuesday, while oil prices sharply declined by 28 percent from Monday’s peak of $120 per barrel.
Ether (ETH) remained relatively weak, though it held above the key $2,000 mark at the time of reporting. Some altcoins recorded more substantial gains, including Hyperliquid and Zcash, which each surged more than 11 percent. Overall, the market shows tentative signs of stabilization, but traders remain cautious in light of geopolitical uncertainty and lingering volatility in major cryptocurrencies.#crypto#cryptonews https://t.me/coinsignalpublic https://coinsignals.net
