Bitcoin under pressure: The war pushes investors to flee risk

Bitcoin is going through a turbulent phase. As the conflict between the United States, Israel, and Iran enters its fourth week, financial markets are wavering and capital is evaporating at an alarming rate. The big question: Can BTC still resist, or is the worst yet to come?

Investors fleeing Bitcoin and stocks amid uncertainty

Since February 28, the day hostilities broke out, markets have been moving to the rhythm of the war. This week, bitcoin, the S&P 500, the Dow Jones, the Nasdaq, and gold all fell by about 5%. Only crude oil stands out, rising 7.30% over the week, a sign that investors are repositioning their portfolios towards traditional safe-haven assets.

The scale of the capital flight movement is unprecedented. According to the Kobeissi letter, ETFs on the S&P 500 (SPY) and Nasdaq 100 (QQQ) recorded combined outflows of $64 billion in three months. This is the largest wave of withdrawals ever observed for these instruments. It wipes out and far exceeds the $50 billion inflows recorded last November.

Bitcoin spot ETFs are not immune to this trend. Despite still having a positive monthly balance of $1.48 billion, outflows are accelerating: $253 million left these funds in two days. A worrying signal, especially after the $6.3 billion of cumulative outflows between November and February.

Glassnode, meanwhile, observes that the market is struggling to absorb selling pressure. Profit-taking briefly reached $17 million per hour before falling back, and with it, the price of BTC slipped below $70,000.

The on-chain analyst sums up the situation well: “Increasing geopolitical uncertainty is compressing demand, limiting the market’s ability to absorb even moderate realizations.”

Worrying parallels with the 2022 Russo-Ukrainian war

Market observers look for guidance in history. And the parallel with February 2022 stands out. During the Russian invasion of Ukraine, bitcoin first plunged, then rebounded by 24% in four weeks, before collapsing an additional 64% by November 2022.

Today, the pattern repeats. BTC rose nearly 10% at the start of the crisis, but this momentum is quickly fading. Crypto commentator Carlitosway identifies three factors of structural fragility:

• Pressure on liquidity, which reduces investors’ buying power.
• Rising energy costs, weighing on mining and margins.
• Forced sales, mechanically fueling downward pressure.

These elements converge towards a scenario of prolonged stabilization. Crypto analyst Finish believes a floor around $55,000 is probable before any significant rebound.

His conclusion is clear: “As long as the war in Iran is not over, it will be difficult for bitcoin to advance. The current context is marked by risk aversion.“

Bitcoin remains trapped in a hostile geopolitical environment, where fear dictates investment decisions. If the 2022 history repeats, recovery will be possible, but it will take time, and the path may pass through $55,000. Patience and caution are required.