It’s been a tough week for the crypto markets, with renewed geopolitical tensions and growing macroeconomic concerns pushing most major coins into the red. From Bitcoin’s slide to altcoins taking a harder hit, investors are clearly shifting into risk-off mode—and the data tells the story.
Bitcoin Drops Below $105K, Altcoins Tumble
Bitcoin has lost nearly 4% this week, falling below $105,000. Ether is down even more, shedding almost 9% to hover around $2,500. Among the top 10 cryptocurrencies by market cap, Dogecoin, Cardano, and Solana were the hardest hit—both DOGE and ADA dropped over 15%.
The drop comes as investors grow increasingly cautious in the face of global uncertainty. Tensions in the Middle East, persistent inflation concerns, and fears over tariffs have all contributed to the risk-off sentiment. In this kind of environment, capital tends to flow away from volatile assets—particularly altcoins.
Bitcoin Dominance Rises as Altcoins Lose Ground
Altcoins were the main victims of this shift. The total altcoin market cap fell by nearly 8% over the past week. Meanwhile, Bitcoin dominance rose to nearly 65% and appears to be climbing. As usual, Bitcoin is seen as the “safer” crypto asset in times of broader market stress.
Stablecoins on the Rise
In a sign of growing caution but also broader adoption, the total market cap of stablecoins has now surpassed $250 billion—more than 10% of all U.S. dollars in circulation. That’s a big milestone, even if stablecoins are still primarily used for trading and arbitrage. According to AllianceBernstein, only around 6% of stablecoin volume last year came from payment transactions.
Is the Digital Gold Narrative Breaking?
Despite ongoing geopolitical turmoil, Bitcoin hasn’t behaved like the “digital gold” it’s often claimed to be. While crude oil is up nearly 10% and gold gained 1.5%, Bitcoin has mirrored equity performance—specifically the Nasdaq, which fell around 1%.
Even BlackRock’s Bitcoin ETF (IBIT) has underperformed gold since the start of the latest Middle East escalation.
Institutional Inflows Still Positive
Not all is bleak. One positive sign: institutional demand for Bitcoin remains strong. IBIT has recorded a 7-day streak of net inflows, pushing its net asset value above $70.7 billion. Since its inception, IBIT has seen over $50 billion in total inflows—suggesting long-term interest from large players is holding steady.
What Happens Next?
Historically, the negative price impact of geopolitical events tends to be short-lived. According to Bitwise, post-event returns tend to outperform. Their research shows a 65% average return 50 days after major crises—largely driven by investor optimism and a desire to stay ahead of inflation by avoiding cash holdings.
While not predictive, this kind of “relief rally” sentiment has shaped many past recoveries.
What On-Chain Data Is Telling Us
Some analysts are also turning to on-chain metrics to better understand where we are in the current cycle. The Puell Multiple—a ratio tracking miner revenue—has peaked at only 1.56 in this cycle (compared to 3.46 in March 2021). Historically, this indicator has exceeded 2 during bull runs, which suggests we may still be mid-cycle.
But the indicator might be losing predictive power, especially as miners face increased difficulty and have to sell more BTC just to break even.
Meanwhile, outflows from exchanges are rising, and whale and retail inflows into Binance are dropping—often seen as a bullish sign since coins are being withdrawn to be held rather than sold.
Low Liquidity = Higher Risk
Lastly, Bitcoin trading volumes are unusually low—similar to levels seen before the Trump election. Low liquidity creates fragility in the markets. While it could set the stage for a supply shock if buying returns, it also increases the risk of sharp corrections if panic selling sets in.
Macro Outlook: Mixed Signals
On the macro front, there’s plenty to digest. U.S. CPI came in stable last week, which is good news in light of the tariff war. Consumer sentiment also surprised to the upside, but retail sales dropped by 0.9%—a red flag for demand.
The Fed is expected to keep rates steady at 4.5%, but all eyes are on Jerome Powell’s speech for clues on what comes next.
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