- Bitcoin fell nearly 5% recently amid a broad market decline, while crude oil saw a 53% surge since the onset of the Israel-Iran conflict.
- Record outflows of $64 billion from major equity ETFs and $253 million from spot Bitcoin ETFs over two days highlight a significant capital exodus.
- Analysis drawing parallels to the 2022 Russia–Ukraine war suggests Bitcoin may face a prolonged stabilization phase due to geopolitical uncertainty.
- Market data from Glassnode indicates compressed demand depth is limiting the market’s ability to absorb selling pressure.
After a strong start, Bitcoin is down nearly 5% this week alongside major stock indices and Gold, while crude oil has surged following the escalation of the US and Israel-Iran war. This coordinated weakness signals a broad, risk-off shift in capital flows across global investment markets as the Middle East conflict continues. Consequently, a historic capital exodus is underway, with reports highlighting a combined $64 billion outflow from the S&P 500 and Nasdaq 100 ETFs over the past three months.
The spot Bitcoin ETFs mirrored this trend, recording $253 million in outflows over two days despite positive monthly flows. However, this recovery appears fragile against a backdrop of $6.3 billion in cumulative outflows between November and February. Meanwhile, Glassnode data suggests the market is struggling to absorb selling pressure, noting “Broader geopolitical uncertainty appears to be compressing demand depth.”
Market participants are framing Bitcoin’s price action against past geopolitical events, notably the 2022 Russia-Ukraine war. A crypto commentator noted that Bitcoin initially sold off after the 2022 invasion before a brief relief rally and a subsequent deep correction. A similar sequence may be unfolding now, with Bitcoin’s recent rally losing momentum. Analyst Carlitosway linked the weakness to sustained pressure on liquidity and rising energy costs.
Another analyst, Finish, believes the recovery path for Bitcoin might only begin after a price bottom around $55,000. Finish stated, “I frankly think that until the Iran war is settled, it’s gonna be hard for $BTC to rise. The environment is risk off.” This pattern points to a more extended stabilization phase as capital rebuilds and selling pressure clears.
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