Bitwise: Crypto Markets Rebound On Easing Geopolitical Risks As Relief Rally Emerges Amid Fragile Macro And Liquidity Conditions

Cryptocurrency asset manager Bitwise released a new cryptocurrency market analysis reporting a sharp reversal across global asset classes, with digital assets outperforming as expectations of a potential US–Iran peace agreement reduced geopolitical risk. Bitcoin traded near $61,000 mid-week before rising roughly 3% to around $65,000 in early Monday trading. Equities recovered most prior losses over the same period, while gold declined toward $4,000 per ounce, extending its weekly losses and reflecting a rotation away from defensive positioning.

A sentiment gauge tracking crypto markets recovered from last week’s deeply bearish readings, which had marked the weakest levels since February, and moved back into mildly positive territory. The rebound followed an earlier sentiment washout that had increased the probability of a short-term technical recovery. However, the broader assessment remained cautious, with the move characterised as a relief-driven bounce rather than confirmation of a sustained trend shift given still-fragile conditions.

Risk-on Rotation Driven by Geopolitical Easing, with Bitcoin and Equities Rebounding while Gold Weakens

Cross-asset flows were shaped by improving geopolitical expectations, with reports of progress toward a US–Iran framework contributing to a reduction in perceived risk. Equity markets, including the S&P 500, stabilised and recovered earlier losses, while Bitcoin mirrored this recovery after stabilising near mid-$60,000 levels. Gold’s decline reinforced the shift, as demand for traditional safe-haven assets weakened alongside easing geopolitical tensions.

Within equities, volatility remained concentrated in the artificial intelligence and semiconductor segment, where price action diverged from strong underlying earnings signals. Despite notable revenue growth in AI-related businesses, select semiconductor stocks experienced sharp declines, highlighting stretched valuations and sensitivity to positioning rather than fundamentals alone. This dynamic was consistent with concerns that the AI sector may be entering a phase of heightened volatility driven by supply constraints, infrastructure bottlenecks, and cyclical pressure rather than demand weakness.

Relative valuation indicators pointed to a widening divergence between Bitcoin and major technology equities. On the Mayer Multiple, which compares price levels to the 200-day moving average, Bitcoin fell below 1.0, a threshold historically associated with undervaluation phases. In contrast, Nvidia continued to trade at a significant premium to its long-term trend, underscoring a split between deep-value positioning in digital assets and extended valuations in AI-linked equities.

Energy markets also responded to geopolitical developments, with crude oil prices declining on expectations of improved supply stability. Digital assets recorded broad-based gains, led by Ethereum and several large-cap altcoins, although sentiment indicators suggested conditions remained fragile. Fear-based readings continued to dominate, and Bitcoin maintained a technical downtrend below key moving averages, indicating that recent gains were still occurring within a corrective phase.

Attention remained focused on upcoming monetary policy signals, with markets widely expecting the Federal Reserve to maintain current interest rates. Pricing implied a near-certainty of a hold, shifting investor focus toward forward guidance, inflation projections, and communication tone. Recent macro data had reinforced expectations of a more restrictive policy stance, reducing the likelihood of near-term easing and maintaining pressure on risk assets sensitive to discount-rate assumptions.

Monetary Policy Outlook and Crypto Positioning Remain Key Near-Term Drivers

Investment flows in crypto-related products showed mixed but stabilising conditions. While Bitcoin-focused exchange-traded products continued to experience net outflows, Ethereum, altcoin baskets, and thematic digital asset strategies recorded inflows, indicating broader dispersion in investor exposure. This pattern suggested selective risk-taking rather than uniform allocation across the asset class.

Derivatives and on-chain data reflected a market recovering from recent deleveraging. Futures positioning shifted away from offshore leverage toward institutional venues, while funding rates and basis levels moderated, signalling reduced speculative intensity. Options positioning became more balanced, with mixed demand for downside protection across crypto-native and ETF-linked markets. Dealer positioning remained skewed negatively, increasing sensitivity to price moves around key technical levels.

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