After a strong start to the week, Bitcoin (BTC) is down nearly 5%, alongside the S&P 500, DOW, Nasdaq, and Gold. Crude oil, on the other hand, has risen 7.30% and is up 53% since the US and Israel–Iran war began on Feb. 28.
The collective market weakness highlights a coordinated shift in capital flows as the war continues in the Middle East, with an uptick in outflows from the S&P 500 and Nasdaq 100 exchange-traded funds (ETFs) further highlighting traders’ decision to cut risk.
Capital exodus takes place across all investment markets
The Kobeissi Letter reported a combined $64 billion outflow from the S&P 500 (SPX) ETF and Nasdaq 100 ETF (QQQ) over the past three months, the largest on record.
This reverses a $50 billion inflow seen in November and pushes outflows to 5% of the total assets under management.
SPY, QQQ ETF outflows chart. Source: Kobeissi Letter/X
The spot Bitcoin ETFs mirrored the broader market weakness, recording $253 million in outflows over the past two days.
While the monthly ETF flows remain positive at $1.48 billion, this comes against the backdrop of $6.3 billion in cumulative outflows between November and February, highlighting a fragile recovery in investor demand.
Glassnode data suggests the market is struggling to absorb the selling pressure. The net realized profit-taking briefly accelerated to around $17 million per hour (24-hour average) before losing momentum, after which the BTC price slipped back below $70,000. Glassnode added,
“Broader geopolitical uncertainty appears to be compressing demand depth, limiting the market’s capacity to absorb even moderate realization events.”BTC net realized profit/loss. Source: Glassnode
Related: Market analyst sees further Bitcoin downside, flags $60K as key level
War-influenced market cycles shape BTC price action
Market participants are framing Bitcoin’s move against past geopolitical events, drawing parallels between the current US and Israel–Iran war and the Russia-Ukraine war in 2022.
Coincidentally taking place in February four years apart, crypto commentator Carlitosway noted that following Russia’s attack on Ukraine on February 24,…
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