Bears Take the Wheel: $BTC Slides to $63K as Geopolitics, AI Angst and Profit-Taking Tag-Team the Market 📉

Bitcoin retreated toward $63,000 over the week as a confluence of geopolitical tension, renewed risk-off sentiment and selling from long-term holders dragged the flagship cryptocurrency below key technical levels. The token was changing hands at around $63,020 on Friday, down 1.7% on the day and 50% below its $126,080 record set in October, per CoinGecko data, after failing to hold $65,000 on Wednesday and dropping to an intraday low of $62,640. Earlier in the week, $BTC had touched a monthly high of $65,500 before reversing as traders took profits following news of Iranian strikes on U.S. military bases in neighboring Gulf states — a conflict that has now extended into a second week of open strikes. By Monday, the largest cryptocurrency had stabilized near $64,200, little changed on the day, with ether (ETH) at $1,860.

Analysts framed the pullback as part of a broader rotation out of risk rather than a crypto-specific deterioration. Tim Sun, senior researcher at Hashkey, told Decrypt that bitcoin's drop broke below a "$64,500 Put Wall" tied to that week's options expiry — a heavy cluster of put open interest that had acted as short-term support — and noted that risk appetite across markets has "cooled down significantly," with global stocks correcting and a deleveraging in semiconductor and AI-related assets accelerating. Daniela Hathorn, senior market analyst at Capital.com, described the move as "a broader bout of risk aversion rather than a deterioration in crypto-specific fundamentals," adding that bitcoin has grown "increasingly sensitive to the macro environment," with rate expectations, geopolitical uncertainty and shifting sentiment steering short-term moves. Market maker Wintermute said bitcoin has failed twice this week to break above $65,000, with profit-taking and weak spot trading volumes suggesting the move lacks conviction.

The pressure has been reinforced by persistent selling from long-term holders. According to Glassnode, more than 65% of the coins flowing into exchanges are long-term holders realizing losses — a reading it said matches earlier bear-market phases, when that cohort "dominated the sell side before eventually exhausting." Sun said investors who have held for one to two years are "gradually accepting losses and exiting," a wave that has capped the recovery even after an encouraging U.S. inflation report. Derivatives positioning points to spot-led selling rather than levered liquidations: ETH open interest slipped to 14.35 million ETH from a five-week high of 14.45 million ETH, while OI in XRP rose to a 10-day high of 2.21 billion XRP alongside a 0.6% drop in spot. Negative 24-hour cumulative volume deltas across several tokens indicate short plays are being executed at market orders rather than passive limit orders, and SUI positions increased 15% to 654 million tokens.

War-driven oil prices amplified the risk-off tone. Brent crude rose as much as 4% to $91.42 a barrel on Monday, its highest level since June, as U.S. and Iranian strikes widened beyond military targets, rekindling inflation concerns just as this month's soft U.S. price data had soothed them. Crypto markets also continued to digest the release of Moonshot AI's Kimi K3 open-weight model, which took the top spot in a widely watched coding benchmark and triggered a semiconductor selloff that dragged crypto down at the end of the previous week. South Korea's Kospi fell 3.5% on Monday as traders returned from their holiday, while U.S. Nasdaq 100 futures steadied, up 0.5%. The Crypto Fear & Greed Index remained in "Extreme Fear" territory.

On the flow side, U.S. spot bitcoin ETFs recorded a $425 million outflow on Monday before taking in $181 million on Tuesday and $108 million on Wednesday, a "marginal recovery" that was insufficient to lift the market, according to Sun. The funds have drawn about $51 billion since launch. Among altcoins, PUMP and ZEC each fell 4.4% after Tuesday's rallies faded, MORPHO rose 3.5% as it targeted the $2.20 resistance level, and Robinhood Chain memecoin CASHCAT drew attention as its market cap retreated to $91 million from $220 million in its first week. Eyes now turn to Friday's Clarity Act hearing, Friday's second-quarter options expiry and the upcoming slate of major tech earnings as the next tests for sentiment.