Crypto Market Weekly Report: Geopolitical Conflicts Intensify, BTC Price Under Pressure

This week, the crypto market faced multiple tests, including support from institutional funds, rising risks in derivatives, and a sudden escalation in geopolitical risks. The price of BTC fluctuated between $102,000 and $109,000, experiencing a brief panic sell-off over the weekend due to the U.S. raid on Iranian nuclear facilities, followed by some recovery.

The internal structural strength of the crypto market remains intact, serving as an important support for stable prices. However, affected by geopolitical conflicts, short-term traders have priced BTC downwards. Under stable internal structures, the subsequent trend of BTC will mainly depend on whether the Israel-Palestine conflict continues to escalate. If the conflict gradually eases, BTC is expected to return to around $105,000.

Policy, Macroeconomics and Economic Situation

The Israel-Hamas conflict has escalated in a spiral manner this week.

From June 16 to 18, Israel carried out precision airstrikes on targets within Iran, and Iran subsequently retaliated with missiles and drones, escalating regional firepower clashes. The market then entered a defensive mode: Brent crude oil accumulated a nearly 7% increase for the week, briefly surpassing $78; gold also rose in tandem, reaching a peak of $33,452.37 per ounce.

On June 19, the White House publicly stated for the first time that it is "evaluating military options," marking a shift from behind-the-scenes coordination to open intervention by the United States. On the day the news was announced, Brent crude oil futures rose 2.8% to $78.85, reaching a five-month high; the VIX volatility index increased, and U.S. Treasury yields fell as a safe-haven response.

On June 20, the market briefly calmed down, but the optimistic sentiment was quickly shattered. The U.S. President ordered the deployment of B-2 bombers for precision strikes on three Iranian nuclear facilities in the early hours of June 21. This move immediately triggered severe diplomatic shockwaves. Iran vowed to retaliate and mentioned the possibility of implementing a "selective blockade" in the Strait of Hormuz.

Due to the airstrikes occurring over the weekend, the mainstream financial market's reaction will be revealed on Monday. However, derivatives and offshore trading have already provided forward-looking signals: energy and military industry ETFs rose during night trading; high strike price transactions in crude oil options saw increased volume; meanwhile, high-risk encryption assets faced selling pressure first, with BTC dropping approximately 1.14% and ETH falling more than 2.96% during the trading session.

The recent direct intervention by the United States has escalated the conflict, causing BTC to drop 4.36% for the week. If Iran takes further retaliatory actions, it may further impact the global stock market and the downward pricing of crypto assets.

The current situation in the Middle East is in a gray area of "manageable confrontation" and "escalation." The market is exhibiting a typical pattern of "oil inflation, safe-haven U.S. Treasuries, tech pullback, and precious metals being favored." If the conflict is controlled within a few weeks, the market may digest the situation amid high volatility; however, if it further spills over, the magnitude and pace of global asset repricing will significantly intensify.

Historical data shows that BTC often retreats at the beginning of geopolitical crises, followed by a weak negative correlation recovery with gold. However, if conflicts evolve into dual pressures of global liquidity and funding costs, the sensitivity of Bitcoin and Ethereum will be significantly amplified.

Crypto Market Overview

This week, BTC continued to fluctuate in the range of 102,000 to 109,000 USD, briefly dropping over the weekend due to geopolitical conflicts before partially recovering.

At the beginning of the week, the market reacted to the expectation of "controllable" conflicts between Israel and Palestine, leading to a slight rebound, with BTC reaching a high of 109,000 USD. Continuous net inflows into BTC spot ETFs provided key support for the price. Institutional buying power has become the main force in maintaining BTC prices above 100,000 USD.

The FOMC decision announced on June 19 did not change the oscillating pattern of BTC, but the hedging scale in the futures market has increased. On Friday, there was a large net outflow from the ETH ETF, triggering a chain of deleveraging, with ETH plummeting to $2372 at one point, pulling back other high-risk assets.

On June 20, during the US stock market session, a round of high leverage squeeze caused BTC to quickly drop below $103,000, with ETH, SOL, and others experiencing a decline of 6-9%. This "flash crash" confirms the vulnerability of high leverage in derivatives and marks the first large-scale systemic liquidation since May.

The news of the U.S. airstrikes on Iran's nuclear facilities over the weekend has triggered a new wave of panic. BTC briefly fell below $100,000 but closed down 1.14%, showing relatively strong performance. ETH dropped again by 2.96%, indicating the fragility of liquidity in high-risk assets.

From a technical perspective, BTC has temporarily broken below the first ascending trend line, but it is still operating within the range of 90,000 to 110,000 dollars. The structural strength and capital support in the market are generally stable, and this week's decline is mainly due to panic sentiment triggered by geopolitical conflicts. If the conflicts ease, this impact will gradually diminish; if it continues to escalate, it will test the key support levels of 100,000 and 90,000 dollars.

Capital Flow Analysis

After a big surge in May, capital inflow has shown divergence. The capital in stablecoin channels has weakened, while the capital in BTC spot ETF channels remains relatively stable.

This week, the net inflow of BTC spot ETF was $1.022 billion, a decrease from last week's $1.384 billion, but still maintaining a high level. Next week, this data may face challenges, as continued geopolitical conflicts could affect U.S. stocks, making it difficult for BTC ETF funds to rise independently.

In terms of stablecoins, after an inflow of 1.273 billion last week, there was a net outflow of 132 million this week. This trend is consistent with the cooling phenomenon observed in the contract market and the lending market.

This week, ETH spot ETFs saw an inflow of 40.77 million USD, with a reduction in inflow scale in the first half of the week, and over 100 million USD outflow on Friday. The decrease in ETH capital inflow may put pressure on high-risk assets, and a sudden drop could have a significant impact on the market.

Position and Selling Pressure Analysis

Against the backdrop of postponed interest rate cut expectations and rising geopolitical risks, the BTC price remains high at $100,000 to $120,000, mainly supported by institutional allocation and structural forces in the market.

This week, long positions increased by 28,920 coins, while short positions decreased by 24,650 coins, and the inventory of centralized exchanges continues to decline. Due to panic selling and weakened speculative enthusiasm, the net outflow from exchanges has significantly decreased to 1,555.9 coins.

These data indicate that long-term holders' confidence in BTC continues to strengthen, but short-term trading enthusiasm is rapidly cooling. The short-term pricing power of BTC is mainly determined by on-exchange short-term traders and ETF fund flows. Currently, both are showing signs of cooling, and the future market direction will depend on the developments in the geopolitical situation.

If the conflict quickly eases, BTC is expected to return to around $105,000; if the situation worsens, it may fall below $100,000, and even test the $90,000 support (low probability).

In the medium to long term, the fundamental logic of BTC price trends has not changed, unless the Israel-Iran conflict escalates into a regional war with direct U.S. intervention.

Cyclical Indicators

According to data from relevant institutions, the BTC cycle indicator is 0.625, in an upward period.