The crypto market is trading back in familiar territory following a short-lived spike to its highest point since early February on Friday.

Bitcoin BTC$74,857.89 is trading a hair under $75,000 while ether (ETH) is at $2,300, both significantly lower than Friday's highs of $78,300 and $2,460.

One reason for traders to be bullish is that the bitcoin futures market on the CME, a venue favored by institutions, closed at $77,540 on Friday and opened at $74,600 to create "CME gap" that spans 3.8% to the upside. A similar gap occurred last week and was filled before the end of the day on Monday.

The first steps have been taken: Bitcoin's gained 1.5% since midnight UTC, suggesting sentiment is warming following a volatile weekend.

The market tumbled over the weekend as shipping through the Strait of Hormuz came to a halt after opening on Friday. The renewed closure led to a jump in the price of crude oil from $78 to $88 per barrel.

This weighed on risk assets, with Nasdaq 100 and S&P 500 futures both down by 0.59% since midnight.

Derivatives positioning

• Marketwide, crypto open interest (OI) held steady near $120 billion over the past 24 hours. Trading volume, in contrast, jumped 30%, suggesting a surge in activity without a corresponding increase in new positions. That potentially points to increased turnover, short-term positioning or traders rotating risk rather than deploying fresh capital.
• OI in solana (SOL), bitcoin BTC$74,857.89, ether (ETH) and XRP (XRP) held largely steady. OI in HYPE futures declined by 3% alongside as the price fell, pointing to capital outflows. Elsewhere, OI in AVAX and SP 500 perpetuals rose by 6% to 10%, respectively.
• OI in AAVE futures surged to a record high of 3.46 million tokens as collateral damage from the weekend exploit of KelpDAO led to rapid withdrawals of from the Aave lending platform.
• Funding rates tied to BTC, ETH and several other tokens flipped negative, indicating a bias for short positions that would benefit from a price drop in these tokens.
• BTC and ETH options on Deribit continue to trade pricier than calls in a sign of lingering downside concern.
• Block flows featured bias for BTC call spreads, which are directional bets, and ether straddles, a volatility play.

Token talk

• The altcoin sector was rocked by a $292 million exploit of Kelp DAO's rsETH token over the weekend, leading to contagion risks across the DeFi market.
• Total value locked (TVL) on Aave dropped from $26.5 billion to $17.5 billion as a result, with the exploit sparking fears of bad debt hitting Aave’s WETH pool, triggering heavy withdrawals and a liquidity crunch.
• Aave's token, AAVE, rose 2.2% on Monday after tumbling 22% on Saturday.
• The bitcoin-dominant CoinDesk 20 (CD20) Index advanced 1% on Monday, outperforming the altcoin-weighted CoinDesk 80 (CD80) and the DeFi Select Index (DFX), which are up by 0.6% and 0.9%, respectively.
• One particularly volatile token is celestia (TIA), which remains 3.9% down over the past 24 hours even after surging by more than 4% since midnight.
• CoinMarketCap's "Altcoin Season" indicator is at 36/100, demonstrating investor preference for bitcoin following Friday's short-lived breakout.