Recent geopolitical developments contributed to renewed volatility across crypto markets . U.S. airstrikes in the Strait of Hormuz sent Bitcoin (BTC) to its lowest level since April 13 and pushed Ether (ETH) below $2,000 for the first time since March 29 — wiping out $897 million in leveraged long positions in the process. The liquidation activity was heavily concentrated on the long side of the market – long positions absorbed the majority of liquidations while short positioning benefited from the decline :
Total liquidations across all crypto positions reached $958.8 million over 24 hours, per CoinDesk reporters Oliver Knight and Shaurya Malwa. The short side absorbed just $61 million of that. When the long/short liquidation split is that lopsided — roughly 15:1 — it marks a market grinding lower under persistent seller pressure, not the kind of two-way flush that clears positioning and sets up a bounce. That ratio became a notable feature of the session.
Crude Was the Trigger; the Derivatives Structure Did the Rest
The immediate catalyst was oil. Crude jumped from $92 to $96 a barrel before settling near $94 during the European morning, according to CoinDesk. That move in Brent may have reinforced inflation concerns among market participants — and inflation concerns can weigh on higher-risk and speculative assets . Cryptocurrencies are often grouped within that category by market participants
BTC was trading near $73,400 as of the article’s publication at 10:44 UTC, down around 1.2% since midnight but above the day’s low hit around 6:30 UTC. ETH shed 1.5%, slipping below $2,000. U.S. equity index futures were feeling the same wind: S&P 500 futures fell 0.11% and Nasdaq 100 futures dropped 0.25%, reinforcing the risk-off tone heading into the American session.
The derivatives structure underneath this move is what makes it particularly uncomfortable for bulls. Ether open interest climbed to a record 16.39 million ETH ($32.61 billion) — up 0.61% over 24 hours — even as the token slipped below $2,000.. Rising open interest alongside falling prices may indicate increased short positioning or broader derivatives activity . It’s a positioning picture that has sometimes been associated with continued downside pressure
Bitcoin’s positioning tells a different but equally cautious story. Aggregate open interest was roughly flat, but CME open interest fell 9.85% to $7.56 billion — regulated, institutional futures coming off while offshore perpetuals held steady. Funding sits neutral at 0.0058%, so nobody is chasing the move with new leverage in either direction. Institutional futures exposure appeared to decline while offshore perpetual activity remained comparatively stable .
Friday’s $8 Billion Expiry Sits Directly Above Spot
Timing matters here. Approximately $8 billion in options expires on Deribit on Friday — $6.5 billion in bitcoin (roughly 86,000 contracts) and $1.4 billion in ether, per CoinDesk. Bitcoin’s max pain sits at $75,000, just above current spot near $73,400. There is $375 million in put notional clustered at that strike and $640 million in open interest stacked at $80,000 — the 200-day moving average.
With spot below max pain and a large expiry less than 24 hours away, the structure may contribute to increased market focus around the $75,000 level, which may become relevant as participants manage exposure into expiry . Whether spot actually converges on that level depends on whether the Hormuz situation deteriorates further — current positioning may contribute to near-term volatility to any sharp sell-off extending much below current levels before expiry.
One further wrinkle: Deribit’s DVOL volatility index sits near 36, the eighth percentile of the past year. Ether implied volatility is at its first percentile — the lowest since early 2024. Headline vol is crushed, yet the 25-delta put-call skew is at +12.3% on the one-week and +10.3% on the one-month for bitcoin. Traders are paying up for downside protection even as headline volatility reads near-record low. That divergence — cheap vol surface, expensive tail protection — suggests the market hasn’t fully priced the geopolitical risk in realised terms, but some market participants appear to be increasing downside hedging activity .
Altcoin Weakness Extended Across the Market
Beyond BTC and ETH, the collateral damage was wider and messier. The CoinDesk Computing Select Index (CPUS) fell 2.9% after midnight UTC. AI-related tokens experienced notable declines : RENDER dropped 5.5% and FET shed 8.5%. DeFi names JUP and ETHFI each lost around 5%. CoinMarketCap’s Altcoin Season indicator fell to 30/100 — its lowest level in more than 90 days.
XRP and SOL showed a different signal: perpetual funding on both turned negative across nearly every venue, with shorts paying longs on Binance at -0.0123% for XRP and -0.0161% for SOL. That may reflect increased short positioning rather than broad capitulation . XRP open interest also fell 0.49% to 2.28 billion XRP ($2.94 billion), which reads as bullish bets closing out rather than fresh shorts being added. Subtly different from the ETH picture, but the broader market tone remained weak
Humanity Protocol (H) provided the session’s most extreme moment: the token declined sharply than 30% at 21:45 UTC on Wednesday before snapping back almost instantly, then jumping 26% since midnight UTC Thursday. That type of move — a 30% air pocket that fills in minutes — happens during periods of reduced liquidity , bids and asks disappear, and bid-ask spreads can widen significantly . It tells you something about altcoin market depth right now: market depth appeared relatively limited
What Would Change This Picture
Current macro developments may support the prevailing bearish sentiment . A Hormuz escalation that keeps oil above $94 and convinces fixed-income markets that the Fed’s path is complicated would sustain pressure on risk assets broadly — crypto included. The ETH open interest record, the lopsided liquidation ratio, and the elevated put skew have generally reflected cautious positioning
The counter-argument is the options structure itself. Max pain at $75,000 sits above Thursday’s spot print. Large expiries have historically coincided with increased price sensitivity around key strike levels on spot into Friday closes, and with vol so compressed, a deescalation headline — or even a ceasefire rumour — could contribute to increased short-term volatility . The asymmetry in a low-vol, elevated-skew environment is that positive developments can sometimes trigger sharp short-term rebounds in low-volatility environments , even if the directional bias remains downward while the Hormuz narrative persists.
What’s Ahead
- Friday, 29 May 2026 — Approximately $8 billion in Deribit options expire, including $6.5 billion in bitcoin contracts (max pain: $75,000) and $1.4 billion in ether. Tracked via CME Group and CoinDesk.
- Friday, 29 May 2026 — CME Bitcoin futures begin 24/7 trading on Globex, eliminating the long-standing weekend gap structure, per CoinDesk.
Risk Disclaimer: Cryptocurrency and digital-asset derivative markets are highly volatile and may experience rapid price movements, reduced liquidity, forced liquidations, and significant losses over short periods of time. Geopolitical events, options expiries, leverage dynamics, and changing market sentiment can materially affect pricing and volatility. References to market positioning, options activity, volatility patterns, or potential scenarios are illustrative only and should not be interpreted as forecasts, guarantees, or trading recommendations. Trading CFDs involves substantial risk and may result in the loss of your invested capital.. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not indicative of future results. This content is for informational and educational purposes only and does not constitute investment advice.