Bitcoin has spent the past two weeks in a war zone; not literally, but functionally. Since US and Israeli forces launched coordinated strikes on Iran on February 28, crypto markets have been held hostage by geopolitical shock, energy price chaos, and a global risk-off mood that has kept institutional conviction firmly on the sidelines.

Now, with Trump signaling he wants the conflict over soon, what happens to Bitcoin? The answer is based on current on-chain data and market structure, and ETF flows, for instance, are already leaning positively.

Bitcoin Trading Under A Geopolitical Discount

Bitcoin was already showing signs of a market that had been beaten down but not broken before a single missile was fired. On-and-off tensions in the Middle East have had broad consequences across global markets, and Bitcoin was not immune to these pressures. 

Bitcoin hit $74,000 in early March before pulling back as news of Iranian counter-strikes rattled investor sentiment. That price level is now the most important level the market needs to reclaim, and the tensions are the primary obstacle standing in the way.

However, according to the report from Glassnode, the leading cryptocurrency has begun to recover for the larger part of its metrics. Momentum has begun to recover, and the RSI has lifted from recent lows, but price action is still looking for the strength of a decisive bullish move. Still, the realized profit-to-loss ratio, supply in profit, and net unrealized profit and loss (NUPL) are all posting modest improvements.

Can The Bitcoin Price Surge Soon?

The war’s most consequential macroeconomic effect has been on energy prices. The price for a barrel of Brent crude surged to $119.50 per barrel as the conflict intensified, with markets panicking above $100. A resolution to the conflict would likely ease several of the forces currently weighing on global markets. This, in turn, is expected to lead to a stabilization of oil prices. 

Bitcoin tends to respond positively when macro conditions become more supportive of risk assets. Glassnode’s derivatives data shows that traders have already begun positioning for a possible recovery through improving profitability metrics, rising derivatives engagement, and persistent ETF inflows. 

Futures open interest rose 5.1% to $29.4 billion, while perpetual CVD surged 201.7% to $172.6 million, which is a sign of strong buy-side activity in perpetual futures markets.

Options markets are also showing signs of a less defensive outlook. Options open interest climbed from $32.8 billion to $34.1 billion, while the volatility spread narrowed and the 25-delta skew has started declining.

ETF demand could also add to the next Bitcoin rally as the main source of demand. Glassnode reported that weekly net inflows into US Spot Bitcoin ETFs rose from $776 million to $934 million, while ETF trading volumes increased from $16.0 billion to $23.1 billion. 

Interestingly, data from SoSoValue shows that these Spot Bitcoin ETFs have now seen three days of consecutive inflows at the time of writing.

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