Bitcoin and Ethereum are holding steady after plunging earlier this week — but traders aren’t breathing easy just yet.

Since the conflict between Israel and Iran erupted on June 3, Bitcoin has dropped 3% to about $104,000, while Ethereum has shed nearly 10%, falling to $2,500.

But in the past 24 hours, both cryptocurrencies have traded sideways, stuck in a tense wait-and-see scenario as investors sideline themselves.

“Markets will be swayed by rising Middle East conflict updates and any shifts in Bitcoin ETF flows over the coming week,” Vincent Liu, CIO of Kronos Research, a crypto research firm, told DL News.

“Macroeconomic uncertainty could fuel fresh volatility across crypto and drive investor sentiment.”

This week, Bitcoin exchange-traded funds have taken in nearly 10,000 Bitcoin or about $1 billion, according to Coinglass. That brings their total holdings up to about $131 billion.

Hedging bets

Options traders aren’t betting on a speedy recovery for crypto prices.

Deribit data shows that Bitcoin put options — bearish bets — are gaining ground, especially around the $100,000 price tag.

Now, it’s not that traders see a long-term collapse, Liu said, but rather that they’re hedging for short-term swings.

“Puts act as a hedge, especially for spot holders. It’s more risk management in the short term,” said Liu. “As news shifts sentiment between fear and greed, uncertainty grows.”

XRP traders are also hedging their bets for a price drop.

Flaring tensions

Geopolitical tensions have gripped global markets.

US President Donald Trump hinted this week that the US could soon intervene in the Israel-Iran conflict, warning Iran’s Supreme Leader Ali Khamenei that “our patience is wearing thin.”

In fact, Trump cut short a G7 summit and ordered the National Security Council to convene.

Meanwhile, prediction platform Polymarket shows odds of a US military strike against Iran before July at 61%, down from 70% earlier this week.

That saber-rattling has jolted assets.

US stocks dipped, oil prices jumped, while gold slid. Crypto also got caught in the crossfire. Shares of Strategy, Coinbase and Circle fell as much as 4%.

Coinbase and Circle’s shares surged after the Genius Act, a stablecoin bill, passed the US Senate.

Sticky inflation

Data from the Federal Reserve doesn’t offer much optimism, either.

The money printer isn’t coming back anytime soon, said Fed Chair Jerome Powell on Wednesday.

Inflation, meanwhile, remains stubborn, and interest rates will stay high — a situation that doesn’t help risk-on assets like cryptocurrencies.

Moreover, Iran produces 4% of the world’s oil, and the country is at the footsteps of the Strait of Hormuz, through which about 30% of the world’s seaborne oil and 20% of global liquified natural gas passes.

For now, capital markets remain on edge.

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.