Bitcoin held near $71,000 on Tuesday, extending its recent rally even as geopolitical tensions in the Middle East intensified, with the asset continuing to outperform gold.

The cryptocurrency was up about 0.25% since midnight UTC, contributing to a roughly 4% gain over the past 24 hours. Broader crypto markets also advanced, driven by strength in altcoins and a wave of short liquidations.

During Asian hours, AI-related tokens led gains. Bittensor and Fetch.ai rose 5.8% and 4.1%, respectively, after Jensen Huang suggested that artificial general intelligence may already be a reality, boosting sentiment across the sector.

Geopolitical developments remained the main catalyst. Fresh strikes in Tel Aviv and Lebanon kept markets on edge. Earlier, U.S. President Donald Trump said a 48-hour ultimatum tied to the Strait of Hormuz had been paused following “productive” discussions, though Iranian officials dismissed the claim.

Oil hovered near $100 per barrel, while U.S. equity futures, including the Nasdaq 100 and S&P 500, slipped about 0.1%.

Despite the uncertain backdrop, crypto markets have remained resilient. Bitcoin has outperformed gold since the conflict began, challenging the traditional safe-haven narrative.

Derivatives show cautious positioning

More than $550 million in leveraged crypto positions were liquidated over the past 24 hours, with short positions accounting for the bulk of the losses, highlighting a squeeze on bearish bets.

However, the rally has not been accompanied by increased leverage. Open interest in bitcoin futures declined slightly to around 228,000 BTC from 229,000 BTC, with similar trends seen across ether, XRP, and solana markets.

Several altcoin futures—including DOGE, ADA, SUI, AVAX, LINK, and PAXG—recorded open interest drops of up to 10%, suggesting traders are trimming exposure even as prices rise.

At the same time, most tokens showed strong buying activity, reflected in positive cumulative volume deltas, though CRO, XMR, and TON lagged with weaker flows.

Funding rates for major perpetual futures remained positive in the 5%–10% range, indicating a broadly bullish bias.

Options data from Deribit showed continued demand for protective puts in BTC and ETH, though the premium over calls narrowed to 5–6 volatility points from 8–10 earlier, signaling reduced hedging pressure.

Block trades highlighted interest in neutral strategies such as BTC put condors, while ETH flows were dominated by risk reversals.

Altcoins outperform, but concerns remain

Altcoins continued to outpace bitcoin, with tokens like HYPE, OP, and CRV rising around 3% as traders rotated into higher-risk assets in anticipation of a broader breakout.

The CoinDesk 20 Index gained 0.3%, while the altcoin-heavy CoinDesk 80 Index rose more than 1%, reflecting improving sentiment in the sector.

However, risks remain, particularly in decentralized finance. The shutdown of Balancer Labs and a hack involving the Resolv stablecoin project have weighed on confidence, alongside concerns about limited yield opportunities and elevated risks in DeFi protocols.

The memecoin sector also lagged, with the CoinDesk Memecoin Index rising just 0.1%, as several components fell between 3% and 5%.

Overall, while crypto markets are showing resilience and improving sentiment, traders remain cautious amid ongoing geopolitical uncertainty and mixed signals from derivatives markets.