Bitcoin retreated from a one-month peak as oil prices climbed above $85 per barrel, reigniting inflation concerns and prompting investors to seek shelter in assets such as gold, silver, and Bitcoin while reducing exposure to altcoins.

Crypto markets moved lower on Wednesday, with Bitcoin declining about 0.9% since the start of the UTC trading day to around $65,900. Ether also slipped, falling 0.5% to roughly $1,920.

The decline followed Bitcoin’s move to its highest level in more than a month on Tuesday, with traders taking profits after the recent rally pushed prices higher.

The main macro catalyst was the sharp increase in WTI crude prices. The U.S. oil benchmark surpassed $85 per barrel for the first time since June 12 as the Iran conflict intensified, bringing inflation worries back into focus and weighing on broader risk assets.

Stock markets also faced pressure, with Nasdaq 100 and S&P 500 futures moving lower. At the same time, investors rotated into defensive positions, lifting gold by 0.95% to $4,118 and silver by 1.2% as demand for safe-haven assets increased.

The defensive shift was also visible within crypto markets. Bitcoin dominance climbed to 59% as traders moved capital away from altcoins and stablecoins and toward the largest cryptocurrency.

Derivatives Market Activity

Trading momentum cools:
Crypto market volume declined 12% over the past 24 hours to $150 billion, while open interest remained steady near $116 billion. With liquidations totaling only about $165 million, traders appear to be taking a pause after recent market moves.

Long bias fades:
The 24-hour long/short ratio narrowed to 50.59% long and 49.41% short, reflecting a more balanced market than the previous day. While futures positions are always matched between buyers and sellers, this measure tracks whether accounts are leaning net long or net short. The tighter spread suggests bullish confidence has weakened.

HYPE attracts bearish bets:
Hyperliquid’s HYPE token dropped more than 6% in 24 hours, making it one of the weakest performers among major crypto assets. The decline occurred alongside futures open interest rising to 42.8 million HYPE, the highest since June 4. Negative perpetual funding rates and a weak cumulative volume delta (CVD) indicate traders are increasingly positioning for further losses.

XLM faces continued selling:
Stellar’s XLM futures open interest increased for a third straight session, reaching 1 billion tokens. Negative CVD data shows sellers are dominating market orders, contributing to the token’s struggle to maintain levels above $0.19.

Limited repositioning in BTC and ETH:
Open interest for Bitcoin and Ether remained largely unchanged over the last 24 hours, suggesting traders have not significantly altered their positions despite the recent pullback.

Market-wide selling pressure persists:
Most major cryptocurrencies, excluding XMR, XAUT, and HBAR, recorded negative 24-hour CVD readings, highlighting stronger seller activity across the market.

Volatility demand rises:
Bitcoin’s 30-day implied volatility index (BVIV) increased to 40% from 37.5%, showing traders are paying more for protection against potential price swings. Ether’s volatility index also moved higher, pointing to increased expectations for market turbulence.

Options traders remain optimistic:
Bitcoin call options continued to dominate Deribit’s trading activity, with heavy interest around $70,000 and $72,000 strike prices. The demand for upside contracts suggests some traders remain confident in Bitcoin’s longer-term potential despite the short-term decline. Ether options also showed bullish demand, with the $3,000 strike becoming the most traded contract.

Token Market Highlights

Dash (DASH) recorded the largest decline among major tokens on Wednesday, dropping 4.1% to $33.44. Hyperliquid’s HYPE also struggled, falling 3.42% to $58.79 as the token continued its pullback from recent highs.

Midnight (NIGHT) led market gains over the past 24 hours, surging 19% after recovering from Monday’s sell-off. Cardano founder Charles Hoskinson highlighted the project on X, calling it an “incredible ecosystem” supported by strong technology.

Ether.fi (ETHFI) and Ethena (ENA) moved higher despite the broader market weakness, gaining 2.63% and 1.27%, respectively, extending recent strength among DeFi-focused assets.

Ondo (ONDO) remained one of the strongest performers over the past week, climbing 26% in seven days to around $0.40 as investor interest in tokenized real-world assets continued despite cautious market conditions.

CoinMarketCap’s Altcoin Season Index stood at 50/100, slightly below last week’s high, showing that investors have shifted attention back toward Bitcoin as market uncertainty increases.