Crypto Market Weekly Report: Geopolitical Risks Intensify, Bitcoin Price Under Pressure for a Pullback

This week, the crypto market experienced multiple influences from institutional capital support, rising derivative risks, and sudden geopolitical changes. Bitcoin's price fluctuated within the range of $102,000 to $109,000, briefly dipping due to the escalation of the Middle East situation over the weekend, followed by some recovery.

The internal structural forces of the crypto market remain stable, becoming an important factor supporting prices. However, the escalation of geopolitical conflicts has led short-term traders to adjust Bitcoin downward. With the internal structure of the market stable, the subsequent trend of Bitcoin will mainly depend on the developments in the Middle East conflict. If the situation gradually eases, Bitcoin is likely to return to around 105,000 dollars.

Macroeconomic Environment and Geopolitical Situation

This week, the conflict in the Middle East has shown a spiral escalation trend.

From June 16 to 18, Israel conducted precise airstrikes on targets within Iran, and Iran subsequently retaliated with missiles and drones. The market immediately entered a defensive mode, and the prices of crude oil and gold surged significantly.

On June 19, the U.S. government publicly stated for the first time that it is evaluating military options, marking a turning point in the U.S. shift from behind-the-scenes coordination to open intervention. On the day the news was announced, crude oil futures continued to rise, the VIX volatility index increased, and U.S. Treasury yields experienced a safe-haven decline.

On June 21, the United States carried out precise bombings on three nuclear facilities in Iran, triggering intense diplomatic turmoil. The United Nations called for restraint from all parties, while Iran threatened to take retaliatory measures, including a possible "selective blockade" in the Strait of Hormuz.

Due to the airstrike occurring over the weekend, the main financial markets' reaction will be revealed next Monday. However, derivatives and offshore trading have provided forward-looking signals: energy and military-related ETFs are rising in after-hours trading, oil options trading is active, while high-risk crypto assets are experiencing selling pressure first.

The developments in the Middle East situation will continue to affect the global financial markets. If the conflict escalates further, it may lead to rising crude oil prices, increased risk aversion, and put pressure on high-risk assets such as technology stocks and encryption assets.

Crypto market performance

This week, the crypto asset market has experienced multiple influences from institutional capital support, rising risks in derivatives, and sudden changes in geopolitical situations. The price of Bitcoin fluctuated within the range of $102,000 to $109,000, briefly dropping due to the escalation of the situation in the Middle East over the weekend, followed by a partial recovery.

At the beginning of the week, the market's expectation of the "controllability" of the Middle East conflict led to a slight rebound, with Bitcoin spot ETFs experiencing net inflows for several consecutive days, providing critical support for the price. In the context of cooling on-site funds, institutional buying has become the main force to maintain the Bitcoin price above $100,000.

In the middle of the week, the Federal Reserve's interest rate decision had no significant impact on the Bitcoin price trend, but the futures market shows that the hedging scale is increasing.

On Friday, a large net outflow of Ethereum ETFs triggered a chain reaction, causing a significant drop in Ethereum prices and leading to pullbacks in other crypto assets. Subsequently, a round of high-leverage liquidations on the market caused Bitcoin to quickly fall below $103,000, with other major cryptocurrencies experiencing even larger declines.

Over the weekend, news of the U.S. strikes on Iranian nuclear facilities further intensified market volatility. As the only major asset class that trades in real-time 24/7 globally, the crypto market was hit hardest. Bitcoin briefly fell below $100,000, but the decline was relatively limited, while high-risk assets like Ethereum showed even weaker performance.

From a technical perspective, geopolitical conflicts have caused Bitcoin to temporarily fall below the first upward trend line, but it still operates within the range of 90,000-110,000 USD. The internal structural forces of the market remain stable, and the changes in capital support are minimal. This week's price drop is mainly due to the panic sentiment triggered by the escalation of geopolitical conflicts. If the conflicts continue to escalate, it may test the key support levels of 100,000 and 90,000 USD.

Capital Flow Analysis

Recently, the capital inflow has shown divergence, with the funds in the stablecoin channel beginning to weaken, while the funds in the Bitcoin spot ETF channel remain relatively stable.

This week, the net inflow of Bitcoin spot ETFs was $1.022 billion, a decrease from last week's $1.384 billion, but still maintaining a high level. However, if geopolitical conflicts continue to affect the U.S. stock market, this data may face challenges next week.

In terms of stablecoins, there was a net outflow of $132 million this week, in stark contrast to last week's net inflow of $1.273 billion. This trend is consistent with observations in the contract and lending markets.

Ethereum spot ETF had a net inflow of $40.77 million this week, but there was a single-day net outflow of over $100 million on Friday. The decrease in the scale of Ethereum inflows may put pressure on high-risk assets, and a flash crash could have a significant impact on the market.

Position Changes and Selling Pressure Analysis

Against the backdrop of delayed interest rate cut expectations and rising geopolitical risks, the price of Bitcoin has been able to maintain a high level above $100,000, primarily due to institutional allocation and on-site structural forces.

This week, long-term holders increased their positions by 28,920 coins, while short-term holders decreased their positions by 24,650 coins, and the stock of centralized exchanges continued to decline. Due to panic selling and weakened speculative enthusiasm, the net outflow from exchanges drastically reduced to 1,555.9 coins this week.

The data indicates that long-term holders' confidence in Bitcoin continues to strengthen, while short-term traders' enthusiasm is rapidly cooling. The short-term price movements of Bitcoin are primarily determined by on-site short-term traders and spot ETF funds. Currently, both are showing signs of cooling, and the future direction will depend on the developments in the Middle East situation. If the conflict resolves quickly, Bitcoin may return to around $105,000; if the situation worsens, it could fall below $100,000, and even test the $90,000 support (although the probability is low).

Overall, the fundamental logic of Bitcoin's medium to long-term price trend has not fundamentally changed, unless the Middle East conflict evolves into a regional war with direct U.S. involvement.

Cycle Indicators

According to industry data, the current Bitcoin cycle indicator is 0.625, in an upward phase.