Bitcoin and ether edged higher on Monday, while altcoins led a sharper rebound as oversold conditions triggered a relief rally. Still, weak liquidity and persistent macro headwinds continue to keep the broader market fragile.

BTC gained about 2.1% to trade near $66,800, while ETH rose 3.1%. Altcoins outperformed, with Chiliz (CHZ), Fetch.ai (FET), and Optimism (OP) each advancing more than 6%.

Despite the bounce, sentiment remains cautious. The Iran conflict has entered its fifth week, and although Pakistan signaled openness to peace talks, markets remain unconvinced. Brent crude surged to $108 per barrel over the weekend — a sharp rise from pre-conflict levels in the low $70s — underscoring ongoing geopolitical risk.

In traditional markets, Nasdaq 100 and S&P 500 futures were up around 0.25%, while the dollar index (DXY) held steady near 100.2.

Zooming out, crypto markets remain in a broader downtrend, defined by lower highs and lower lows since October. Bitcoin continues to trade within a well-established range, unable to break above $75,000 or below $62,800 since early February.

Derivatives positioning

Futures data suggests the latest rebound lacks strong backing. Bitcoin open interest (OI) has stalled after reaching a near two-month high over the weekend, while near-flat funding rates and negative cumulative volume delta (CVD) indicate a bias toward short positions.

OI also declined during bitcoin’s recovery from around $65,000 in Asian trading, pointing to a move driven largely by spot demand rather than leveraged traders.

On Bitfinex, BTC/USD long positions have climbed to their highest level since November 2023 — a metric that has historically acted as a contrarian signal, often preceding price weakness.

Across major tokens including XRP, ETH, DOGE, and SOL, open interest has remained broadly unchanged over the past 24 hours. Avalanche (AVAX) and Litecoin (LTC) stand out with double-digit increases in OI, though negative CVD suggests the inflows are largely tied to bearish positioning.

Volatility remains subdued. Bitcoin’s 30-day implied volatility has eased back toward 55% after briefly touching 58%, signaling relative calm despite geopolitical turbulence. Ether’s volatility profile shows a similar trend.

Options markets continue to reflect caution. On Deribit, put options remain more expensive than calls across maturities, indicating ongoing demand for downside protection. Dealer positioning is largely positive gamma between $65,000 and $70,000, encouraging buy-low, sell-high activity that reinforces rangebound price action.

Token trends

Market benchmarks tracked the rebound, with the CoinDesk Memecoin Index (CDMEME) and DeFi Select Index (DFX) leading gains, up 2.8% and 2.2%, respectively. The broader CoinDesk 20 (CD20) rose 1.5%.

The strength in altcoins appears largely driven by thin liquidity. Friday’s sell-off pushed many assets deep into oversold territory as supply overwhelmed demand, exaggerating the downside and setting the stage for a relief bounce.

This lack of liquidity has been a persistent issue since October, when a $19 billion liquidation event disrupted market structure and sidelined key participants.

For a more sustainable shift higher, bitcoin likely needs to reclaim and hold above $80,000. Such a move could restore confidence and enable capital rotation into altcoins, helping establish stronger macro support across the market.