Bitcoin Faces Decline Amid Geopolitical Tensions

Bitcoin has experienced a nearly 5% decline this week, influenced by the ongoing conflict involving the United States, Israel, and Iran. According to Odaily, this downturn aligns with simultaneous drops in the S&P 500, Dow Jones, Nasdaq, and gold, while crude oil has surged by 7.3%, marking a 53% increase since the conflict began on February 28. The Kobeissi Letter reports that over the past three months, there has been a record outflow of $64 billion from the S&P 500 ETF and Nasdaq 100 ETF, accounting for about 5% of total assets under management. Additionally, spot Bitcoin ETFs have seen a net outflow of $253 million in the last two days. Data from Glassnode indicates that the market is struggling to absorb selling pressure, with Bitcoin's net realized profit-taking accelerating to approximately $17 million per hour at one point, before losing momentum and falling below $70,000. Analysts suggest that geopolitical uncertainties have compressed market demand depth, making it challenging to absorb even moderate sell-offs. Historical patterns suggest that Bitcoin's current trajectory mirrors its behavior during the Russia-Ukraine conflict, where initial sell-offs were followed by short-term rebounds, only to face continued downward pressure. Analysts believe that rising energy costs, liquidity constraints, and forced selling are prolonging Bitcoin's recovery. Finish anticipates that Bitcoin may find a bottom around $55,000 before gradually recovering, but market caution is expected to persist until the Iran conflict is resolved.