Crypto market strength extended into Tuesday, with bitcoin BTC$70,730.95 gaining by 3.9% since midnight UTC to trade at $71,000 while ether (ETH) is back above $2,000, a level it recently had problems surpassing.

Crypto was not alone in its ascent. U.S. equities and precious metals also after U.S. President Donald Trump said the war in Iran would come to an end "very soon." The dollar and oil gave back much of their gains of the past week.

The Dollar Index (DXY) briefly traded as high as 99.7 on Monday, and is now at 98.5. The crypto market is inversely correlated to the dollar, so a bitcoin breakout could be on the cards if DXY continues to weaken through the rest of the week.

The war in Iran — which, it appears, may now be shorter than many thought — has exposed a resilience in the crypto market that was previously absent. Bitcoin had beaten stocks and precious metals since the conflict began, potentially rebuilding the asset class' reputation as a haven investment.

But it is not out of the woods yet. Bitcoin and the broader market remain in a clear downtrend since early October, characterized by a series of lower highs and lower lows. In order that break that trend, bitcoin needs to trade back up toward $98,000 having established levels of support along the way.

Derivatives positioning

• Open interest (OI) in futures tied to HYPE, the best-performing token of the past 24 hours, has grown 14% to $1.41 billion, according to Coinglass. OI topped 40 million HYPE, a level that remains close to recent lows.
• For both BTC and ETH, open interest has risen more than 5%, outpacing gains in spot prices. This shows fresh capital inflows as markets rally.
• In tether gold (XAUT), futures OI continue to decline and has dropped below 110K XAUT, a sign investors are rotating money out of recent outperformers like gold-linked assets.
• Annualized perpetual funding rates for most tokens remain slightly positive, suggesting a narrow dominance of bullish bets. Tokens such as ZEC and SUI stand out with negative rates.
• Most major cryptocurrencies, excluding BCH, XMR and XAUT, have seen aggressive bidding, as evident from their OI-adjusted cumulative volume deltas.
• BTC and ETH's 30-day implied volatility indices, BVIV and EVIV, have dropped by over 4%, a sign traders are pricing out uncertainty in the wake of oil's drop back below $100.
• Still, on Deribit, BTC and ETH protective puts remain pricier than bullish calls across all time frames. Positioning of market makers is such that volatility could pick up markedly on a potential BTC price move above $75,000.
• Block flows featured demand for BTC straddles, a volatility bet and call spreads, a bullish strategy. In ETH's case, traders chased risk reversals.

Token talk

• The altcoin market was particularly buoyant on Tuesday, with Solana-based DEX token jupiter (JUP) posting a double-digit gain since midnight UTC.
• Restaking token ETHFI also gained, rising by 6.5% to reach its highest point since Jan. 29.
• HYPE, the native token of derivatives exchange HyperLiquid, was more restrained, rising by just 0.5% since midnight. That's despite BitMEX founder Arthur Hayes calling for record highs of $150 in a blog post on Monday. HYPE now trades at $34.8 with much of its 24-hour gains occurring early on Monday before Trump's comments on the war.
• The best performing CoinDesk benchmark over the past 24 hours was the bitcoin- and ether-heavy CoinDesk 5 (CD5) and CoinDesk 10 (CD10) indexes both up by 4.3% while the DeFi Select Index (DFX) was closely behind after rising by 4%.
• The same couldn't be said for the memecoin index (CDMEME), which is at the bottom of the pack after rising by just 2.6%.