QCP: Global Sentiment Takes a Hit as Risk Reversal Indicators Turn Significantly Bearish

On June 13, QCP released its daily market commentary, noting that Asian markets this morning were hit by a shockwave of escalating geopolitical tensions and digital market turbulence. Israel’s preemptive airstrike on Iran’s nuclear facilities (reportedly resulting in the death of Islamic Revolutionary Guard Corps commander Hossein Salami) quickly rippled through risk assets, triggering renewed volatility in global markets. As Tehran vowed retaliation and Washington sought to distance itself from the incident, safe-haven assets surged, with both oil and gold prices soaring.

S&P 500 index futures fell below the psychologically significant 6,000-point mark, and the cryptocurrency market was similarly affected. Bitcoin dropped by about 3%, while Ethereum saw a steeper decline of around 9%. Volatility spiked, especially at the short end, as traders rushed to secure Gamma exposure ahead of next week’s Federal Reserve policy meeting.

Risk reversals have turned markedly bearish, with the implied volatility of short-term BTC put options exceeding that of calls by as much as 5 volatility points, indicating a clear increase in demand for downside protection. Meanwhile, WTI crude oil surged as much as 11% intraday, as markets worried that the Israel-Iran conflict could escalate further. Given Iran’s critical role in global oil production, any further escalation could threaten supply routes, intensify inflationary pressures, and challenge the Federal Reserve’s rate hike stance.

All eyes are now on Tehran’s next move. The digital asset market is currently closely tied to geopolitical tail risks and is expected to continue “trading the headlines.” The decisive factor for short-term market direction will be whether the conflict escalates or diplomatic de-escalation occurs in time—this will impact not only the crypto market but the entire macroeconomic landscape.