Bitcoin opened the week on a strong upward trajectory, only to retreat later, a pattern that mirrors recent crypto‑fund movements and the rising geopolitical strain in the Middle East.
During the first three days of the week, crypto funds attracted roughly $1.44 billion in fresh capital, a surge that coincided with the United States’ strike on Iran. By week’s end, however, net outflows reduced the total weekly flow to about $619 million, according to the latest CoinShares data.
This time, U.S. investors were the primary drivers of activity, outpacing their European and Asian peers.
CoinShares’ research chief James Butterfill noted that Bitcoin alone accounted for $521 million of inflows, while Ethereum and Solana also saw sizable entries; XRP was the sole major token that experienced notable withdrawals.
Price‑wise, Bitcoin tracked the fund movements, climbing nearly 11 % from $66,356 to $73,648 between March 1 and March 5. The rally then reversed, slipping almost 8 % since Thursday and currently hovering around $67,777, based on CoinGecko’s figures.
The early‑week influx of $1.44 billion followed by $829 million of exits reflects routine portfolio rebalancing rather than a loss of confidence, says Bitlease founder Nima Beni. “Managers often build positions early in the week, capture gains, and then trim exposure before weekends or heightened geopolitical risk,” he told Decrypt. “That’s a classic capital‑markets behavior, not a crypto‑specific story.”
Senior market analyst Jonatan Randin of PrimeXBT attributes the late‑week outflows primarily to escalating geopolitical danger. “The Iran situation intensified after IRGC officials confirmed the closure of the Strait of Hormuz, oil prices breached $85 per barrel, and risk appetite deteriorated across all asset classes,” he explained. “When geopolitical risk spikes quickly, institutions pull back from risky assets—including crypto.”
Crude‑oil futures jumped roughly 60 % after the February 28 attack, reaching $119 per barrel, before easing about 14 % over the weekend to settle just above $102.
Geopolitical pressure on oil is now spilling over into equities and, consequently, into Bitcoin, observes Georgii Verbitskii, founder of the TYMIO investment app. “Higher oil prices are squeezing U.S. stocks, and that strain is transmitting directly to Bitcoin,” he said. “In today’s climate, BTC still behaves like a risk asset; when equities falter, crypto tends to follow.”
If tensions continue to rise, Bitcoin could encounter short‑term selling pressure, warns Illia Otychenko, lead analyst at CEX.IO. “The first market reaction to heightened uncertainty is usually risk aversion, prompting investors to shed volatile holdings.”
Randin offers a more guarded view, noting that Bitcoin showed signs of weakness even before the Hormuz episode. “Bitcoin’s correlation with equities is asymmetric—it slides down with stocks but doesn’t climb up alongside them,” he said. “Geopolitical escalation creates headwinds for risk assets broadly, and Bitcoin is no exception.”
Beni frames the dynamic differently. “When institutions dump Bitcoin amid a Strait‑of‑Hormuz shutdown, they are merely playing catch‑up in a financial system that’s becoming irrelevant,” he remarked. “Bitcoin doesn’t need approval from those who control shipping lanes—that’s precisely why they try to keep its price low.”
Despite early‑week optimism, confidence among investors has waned. On the Myriad prediction market—owned by Decrypt’s parent Dastan—participants now assign a 41.6 % probability that Bitcoin will climb to $84,000, down from 50 % a week ago, highlighting fragile sentiment.
Analysts agree that sustained high oil prices amid ongoing uncertainty could weigh on Bitcoin in the near term.
Elevated oil costs can feed inflation expectations and influence monetary policy, potentially prompting central banks to maintain higher rates. Such an environment dampens risk‑on behavior, steering capital away from volatile assets like Bitcoin toward safer havens such as bonds and gold.
Verbitskii echoes this concern: “With Bitcoin already showing structural frailties, macro‑level pressure could translate into further downside if broader market sell‑offs intensify.”