Brent Crude Plunges 7% as U.S.-Iran Pause Lifts Crypto

Geopolitical de-escalation over Strait of Hormuz reduces inflation concerns, boosting bitcoin and DeFi tokens

The U.S. and Iran paused strikes over the Strait of Hormuz on July 27, sending Brent crude tumbling 7% to around $87 per barrel as mediators continued talks. The decline in oil prices eased inflation concerns and lifted cryptocurrency and equity markets.

Bitcoin held near $65,000 following a spike to $65,600 at the start of futures trading on Sunday. Ether outperformed the benchmark, rising 0.51% to $1,963 and approaching the $2,000 level for the first time since early June. The broader crypto market showed strength, with DeFi tokens leading: AAVE rose 9%, LDO gained 9.39%, and ONDO climbed 7%.

PUMP emerged as the session’s largest gainer, surging 12.24% to push its market cap toward $800 million from $570 million two weeks prior. ETH futures open interest jumped to 14.66 million ETH, the highest level since June 7.

Fed rate decision Wednesday shapes market outlook

The pause in hostilities trimmed the odds of a Fed rate hike this week. Markets now price a 30.5% chance of a rate move on Wednesday, down from 37.4% at Friday’s close. The Federal Reserve meets this week to decide whether to raise interest rates for the first time in three years, with inflation running at 4.1%.

Futures liquidations data show forced closures of short bets accounted for most of the 24-hour liquidation tally of $312 million. Bitcoin’s 30-day implied volatility index is near 40%, just above the recent two-month low of around 38%. Ether’s volatility index is flashing a similar signal of market stability.

Equity markets follow crude decline

U.S. equity futures gained alongside crypto assets. Nasdaq 100 futures rose 1.36%, while S&P 500 index futures climbed 0.80%. The CD20 Index, tracking crypto-native tokens, gained 1.6% over 24 hours.

The recovery reflected reduced expectations for aggressive rate hikes. A lower probability of Fed tightening typically supports risk assets including cryptocurrencies, which face headwinds from higher borrowing costs.