Crypto Market Weekly Report: Geopolitical Tensions Trigger Asset Repricing

This week, the crypto market has experienced the intertwined effects of multiple factors. Continuous inflow of institutional funds provides support, but the sentiment in the derivatives market is rising, while geopolitical risks have suddenly intensified, collectively shaping the market landscape.

Bitcoin has been testing the range of $102,000 to $109,000 consistently. Over the weekend, there was a brief panic sell-off in the market due to the U.S. raid on Iranian nuclear facilities, which was later followed by some recovery. Although the internal structure of the crypto market remains stable, short-term traders have repriced Bitcoin downward due to the escalation of geopolitical conflicts.

The future trend will mainly depend on the evolution of the Iran-Israel conflict. If the conflict escalates further, such as Iran directly attacking U.S. military facilities or blocking the Strait of Hormuz, it will have a greater impact on the market. However, if the situation gradually eases, Bitcoin is expected to return to around $105,000.

Geopolitical Situation and Macroeconomic Environment

This week, the conflict between Israel and Iran has shown a spiral escalation trend. Israel carried out precise strikes on targets within Iran, and Iran subsequently retaliated with missiles and drones. The market immediately entered a defensive mode, with significant increases in the prices of crude oil and gold.

The U.S. government has publicly stated for the first time that it is assessing military options, marking a critical point from behind-the-scenes coordination to open intervention. This statement has driven oil prices to a five-month high, while also triggering a rise in risk-averse sentiment.

The situation sharply deteriorated again after a brief easing. The United States carried out precision bombings on three Iranian nuclear facilities, triggering intense diplomatic shockwaves. The United Nations called for restraint from all parties, while Iran threatened retaliatory actions and even considered blocking the Strait of Hormuz.

This series of events has pushed the market into a typical risk-averse mode. Energy and military assets have strengthened, while high-risk assets such as encryption currencies have come under pressure and declined. Bitcoin fell 4.36% over the week, decreasing by $4602.38.

Crypto Market Dynamics

This week, the crypto market has shown a complex situation. Bitcoin continues to fluctuate in the range of 102000-109000 USD, experiencing a brief decline over the weekend due to geopolitical tensions, followed by some recovery.

Institutional capital inflows remain a key factor supporting prices. Bitcoin spot ETFs have seen net inflows for several consecutive days, providing important support for prices amid macro uncertainties.

However, the derivatives market shows that hedging demand is on the rise. On Friday, there was a significant net outflow from the Ethereum ETF, triggering a chain reaction that led to price declines in multiple crypto assets. The escalation of geopolitical tensions over the weekend further intensified market volatility.

From a technical perspective, Bitcoin has temporarily fallen below the first upward trend line, but it is still operating within the $90,000-$110,000 range. The internal structural forces of the market remain intact, and funding support is relatively stable. The recent decline is mainly due to panic emotions triggered by geopolitical conflicts.

Capital Flow Analysis

Bitcoin spot ETFs saw an inflow of $1.022 billion this week, which, although lower than last week, remains at a high level. However, the ongoing geopolitical tensions may affect next week's inflow situation.

This week, the stablecoin channel experienced a net outflow of $132 million, consistent with the trends observed in the contract and lending markets. The Ethereum spot ETF saw an inflow of $40.77 million this week, but there was an outflow of over $100 million on Friday.

Long-term holders continue to increase their positions, while short-term traders are reducing their holdings. The stock of Bitcoin on exchanges continues to decline, but the outflow scale has significantly decreased compared to the previous period, now only 1555.9 coins. This data indicates that long-term investors' confidence in Bitcoin is strengthening, while short-term speculative enthusiasm has cooled.

Market Outlook

The fundamental logic of Bitcoin's medium to long-term price trend has not fundamentally changed, unless the conflict between Israel and Palestine evolves into a regional war with direct U.S. involvement. In the short term, if the conflict quickly eases, Bitcoin is expected to return to around $105,000. However, if the situation continues to worsen, it may drop below the $100,000 mark and even test the $90,000 support level.

According to the EMC BTC cycle indicator, the current value is 0.625, indicating an upward phase. However, the evolution of geopolitical risks will be a key factor determining the short-term direction of the market.