Oil Drops, Hopes Rise: Brent's 7% Plunge Lets Crypto Forget Its Existential Dread for a Day 🛢️

Brent crude tumbled more than 7% to about $87 a barrel after the U.S. and Iran paused strikes across the Strait of Hormuz, easing inflation concerns that had weighed on risk assets for weeks and giving crypto markets a lift into a pivotal Federal Reserve decision. The futures market responded quickly, with Nasdaq 100 futures up 1.36% and S&P 500 futures up 0.80% as mediators continued talks.

The CoinDesk 20 Index (CD20) gained 0.1% since midnight UTC and 1.6% over 24 hours, while bitcoin ($BTC) traded near $65,318 after touching $65,600 at the start of Sunday's futures session, later slipping to about $65,200 since midnight. Ether ($ETH) outperformed, rising 0.51% to $1,963 and approaching the psychologically significant $2,000 level for the first time since early June. DeFi tokens led the rebound, with AAVE up 9%, LDO up 9.39% and ONDO up 7%, while PUMP surged 12.24%, lifting its market capitalization toward $800 million from $570 million two weeks earlier.

The shift in Middle East tensions trimmed expectations of a rate hike at this week's Fed meeting, with CME Group's FedWatch tool showing markets pricing a 30.5% probability of a move on Wednesday, down from 37.4% at Friday's close, against a backdrop of inflation near 4.1%. Bears bore the brunt of bitcoin's bounce, with short liquidations accounting for the majority of the 24-hour tally of $312 million in forced closures as spot prices pushed back above $64,000.