Crypto Market Weekly Report: Geopolitical Tensions Rise, Bitcoin Pressured in the Short Term

This week, the crypto market experienced the impact of multiple factors, including institutional funding support, rising caution in the derivatives market, and a sudden escalation of geopolitical risks. Bitcoin fluctuated in the range of $102,000 to $109,000, experiencing a brief decline over the weekend due to the situation in the Middle East, but has since stabilized.

Macroeconomic Environment

The situation in the Middle East has shown a spiral escalation this week. From the 16th to the 18th, there were mutual military strikes in the region, leading to an increase in the prices of crude oil and gold. On the 19th, the U.S. government stated it was assessing military options, marking a possible shift from behind-the-scenes involvement to open intervention. The market briefly eased on the 20th, but was soon disrupted by the U.S. raid on Iranian nuclear facilities in the early hours of the 21st.

This military action has triggered a strong diplomatic response. The United Nations has called for restraint, while Iran has threatened potential retaliatory measures, including a "selective blockade" in the Strait of Hormuz. The financial markets have subsequently entered a typical risk-averse mode, with crude oil and precious metals rising, while technology stocks and crypto assets are under pressure.

crypto market performance

Bitcoin fell 4.36% this week to $105,397.62. Ethereum performed weakly, experiencing significant declines twice during the week, with a total drop of nearly 13%. Other mainstream tokens like SOL and DOGE also saw varying degrees of correction.

From a technical perspective, Bitcoin has temporarily fallen below the first upward trend line, but is still operating within the range of 90000-110000 dollars. The internal structural forces of the market remain intact, serving as an important support for stabilizing prices. However, influenced by geopolitical factors, short-term traders have priced Bitcoin downwards.

Capital Flow

Bitcoin spot ETF had a net inflow of $1.022 billion this week, which is a decrease compared to last week but still maintains a high level. On the stablecoin side, there was a slight net outflow of $132 million. The inflow scale of Ethereum ETF also decreased, with over $100 million flowing out on Friday.

Institutional funds remain the main force supporting Bitcoin prices. Long-term holders continue to increase their positions, while the enthusiasm of short-term speculators has cooled. The supply of Bitcoin on centralized exchanges continues to decrease, but the outflow this week has significantly dropped to 1555.9 coins.

Market Outlook

In the short term, the Bitcoin trend will be highly dependent on the developments in the Middle East situation. If the conflict eases, Bitcoin is expected to return to around 105,000 USD; but if the situation worsens further, it may fall below the 100,000 USD mark and even test the 90,000 USD support level.

However, from a medium to long-term perspective, the fundamental logic of Bitcoin's price movement has not changed. Unless regional conflicts evolve into a large-scale war with direct involvement from the United States, the structural forces in the market will continue to support the price of Bitcoin.

According to the EMC BTC Cycle Metrics provided by eMerge Engine, the current value is 0.625, in an upward phase, indicating a medium-term positive signal.