Bitcoin Stalls at $70K as SPY, QQQ ETFs Post Record Outflows

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.”

Cryptocurrencies, Russia, Israel, Bitcoin Price, Iran, Markets, United States, Stocks, Price Analysis, Market Analysis, ETF — *BTC net realized profit/loss. Source: Glassnode*

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, 2022, Bitcoin initially sold off before posting a 24% relief bounce in the following four weeks. The momentum faded soon after, as BTC dropped another 64% by November 2022.

A similar sequence is unfolding this month, with BTC rallying nearly 10% at one stage last week since the beginning of the war, but momentum is now slowing down.

Carlitosway linked the weakness to sustained pressure on liquidity, rising energy costs, and continued forced selling during periods of stress, all of which reduce the follow-through demand for Bitcoin.

The pattern points to a more extended stabilization phase, where the recovery may take time as capital rebuilds and the selling pressure clears.

Crypto analyst Finish believed that the recovery path for Bitcoin might take place after a price bottom around $55,000. The analyst added,

“I frankly think that until the Iran war is settled, it’s gonna be hard for $BTC to rise. The environment is risk off, the SPX lost trillions in capitalisation, which leads me to a more neutral stance.”