Bitcoin’s (BTC) recent rally was powered by stronger spot demand and more than $1.1 billion in exchange-traded fund inflows over three sessions, but renewed outflows on Thursday and a cautious macro backdrop suggest the market is not out of danger yet, as the price of the foremost cryptocurrency slips back below $70,000.
Analysts from Bitfinex said in a March 5 note that spot market strength has improved materially since the weekend escalation in the Iran conflict, with aggressive buying across exchanges helping bitcoin reclaim key levels.
The exchange said roughly $3.5 billion has been market-bought in a “systemic manner” since March 1, while the Coinbase premium turned positive after a 40-day stretch in negative territory, signaling renewed U.S.-side demand.
Flows reverse
That spot-led bid coincided with a reversal in ETF flows after a three-day positive streak. U.S. spot bitcoin ETFs took in $458.2 million on March 2, $225.2 million on March 3, and $461.9 million on March 4, extending the rebound that The Block covered earlier this week.
However, that run broke on March 5, with the group posting $227.9 million in net outflows. BlackRock’s IBIT led inflows on each of the first three sessions before turning negative on the fourth, per SoSoValue data.
The return to withdrawals leaves the complex with just under $1 billion of net inflows over the March 2-5 stretch.
More importantly, the reversal was large enough for Bitfinex to argue that institutional buyers were beginning to absorb distribution pressure from miners and older holders, though it stopped short of calling the move a clean trend change.
Binance Research struck a similarly balanced tone in a weekly report shared with The Block. The firm said bitcoin’s plunge to about $63,000 during the initial geopolitical shock, followed by a rapid rebound above $70,000, suggested the market was “watchful, not panicked.”
Analysts from Binance added that market sentiment was still in “extreme fear” throughout February, funding rates had fallen to their lowest levels since 2023, and long-term holder selling pressure appeared to be fading as spot ETFs recorded their first positive weekly flow since mid-January.
Beyond risk asset tag
The current market state has encouraged some analysts to look beyond the usual “risk asset” label as well.
Matt Mena, crypto research strategist at 21Shares, said bitcoin’s strength during the current crisis has revived the idea of BTC as a “flight-to-safety” or “gold beta” trade, especially after gold surged first and bitcoin lagged. Mena’s insight echoed thoughts shared by Coin Bureau co-founder Nic Puckrin earlier this week.
Mena also said spot ETF holders have remained relatively sticky through the recent drawdown, with only modest reductions in total holdings.
Some other experts, however, maintained a more skeptical view. Nicolai Sondergaard, research analyst at Nansen, said bitcoin has spent weeks ranging between roughly $60,000 and $71,000 and still needs to hold a clean break above the top of that band before the market can treat the move as something more durable.
Nansen’s analysts said there’s evidence of selective positioning rather than broad-based buying, with institutions still favoring stablecoins and yield strategies over outright directional risk.
Bitcoin and oil
QCP Capital analysts also urged caution, arguing that geopolitics may be driving headlines, but oil is still driving markets. The firm stated that bitcoin first held firm before breaking higher on strong ETF inflows and a jump in open interest, only to surrender part of those gains as broader macro volatility returned.
According to the firm, the key question is whether energy prices stay elevated enough to keep yields heavy and cap a more sustained beta rally.
The tension is becoming clearer in cross-asset pricing. Binance Research said bitcoin’s relationship with crude appears inconsistent and regime-dependent rather than stable, warning investors not to treat the asset as a simple hedge against oil shocks.
The Binance researchers also opined that markets are still balancing three unresolved themes at once: geopolitical escalation, AI-related pressure on software margins, and broader fragility in private credit.
Bottom line
For now, bitcoin’s rebound looks healthier than many earlier rallies because leverage has not yet fully overheated.
Bitfinex said open interest has risen broadly in line with spot, while perpetual funding remains moderate rather than euphoric. Still, the exchange also flagged a dense long-liquidation zone around $70,000 and said leveraged positions have rebuilt enough that a sharp downdraft could still test support closer to $66,000.
A possible retest keeps the market in a delicate middle ground: stronger spot absorption, firmer institutional engagement, and fading long-term holder distribution on one side, versus renewed ETF outflows, oil-led macro pressure, and lingering event risk on the other.
The latest bounce may be telling investors that buyers are returning. But as CryptoQuant argued in a separate note this week, it may still be safer to read the move as a relief rally until the market proves it can sustain demand through the next round of payrolls, inflation data, and geopolitical headlines.
Bitcoin changed hands around $69,925, down over 4.1% in the last 24 hours, The Block’s BTC price page shows. Ethereum (ETH) and major altcoins followed with similar declines as markets head into another weekend.
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