Geopolitics moves the markets
Global markets are on standby, digesting geopolitical news and calibrating risks ahead of a potential surge in volatility. Gold, which initially soared in response to the Israeli strike on June 13, has since pulled back. This weakens the demand for safe-haven assets, even as WTI oil holds steady around the $75 mark.
Energy markets remain closely tied to the conflict between Israel and Iran. Speculation about possible U.S. military intervention continues to simmer beneath the surface. The dollar has moderately weakened as markets began to price in an increased likelihood of direct U.S. involvement in the region within the next 48 hours. This has prompted a cautious rotation out of the American currency.
Bitcoin in a sideways market, derivatives signal danger
Bitcoin continues to trade in a sideways range. Price movement remains muted despite growing macroeconomic uncertainty and the usual rumble of political noise from Trump's social media. Investor sentiment is frozen in anticipation, and positioning shows that market participants are waiting for a more significant catalyst.
However, derivative markets show more cautious sentiment. Risk reversals for both Bitcoin and Ethereum continue to demonstrate a preference for downside protection for June and September expirations. This indicates that holders of long positions are actively hedging their spot positions and preparing for pullbacks.
Ethereum shows volatility compression
Notably, market expectations for Ethereum price fluctuations in June have fallen below September forecasts. This refers to options with a strike price at the current rate — such contracts that become profitable with any significant price movement up or down. Typically, short-term volatility expectations are higher than long-term ones, as the market anticipates greater uncertainty in the near term. The current situation shows the opposite — investors expect a calmer June.
QCP Capital explains this strategy as preparation for two scenarios. In the first case, if the market continues to move sideways, option sellers will receive a premium from the options depreciating over time. In the second scenario, with a sharp price movement in either direction, long volatility positions will yield substantial profits.
While the cryptocurrency market remains compressed like a spring. The next headline, macroeconomic shift, or important event could be the spark that reignites volatility. Analysts at QCP Capital see the current situation as the calm before the storm, as the market seems to be holding its breath in anticipation of a decisive impulse.