Bitcoin traded near $68,000 on Saturday, a level not seen since early March, as a recent rally faltered amid profit-taking by large holders and renewed investor caution following U.S. And Israeli strikes on Iran. The price movement comes after a period of intense volatility triggered by the geopolitical tensions, with the crypto market experiencing a sharp sell-off and subsequent partial recovery.
Data from blockchain analytics firm Santiment indicates that wallets holding between 10 and 10,000 bitcoin aggressively accumulated the cryptocurrency between February 23 and March 3, when prices ranged from $62,900 to $69,600. This accumulation coincided with the initial market reaction to escalating tensions in the Middle East. However, as bitcoin approached $74,000 on Thursday, these same wallets began to offload their holdings, selling approximately 66% of their recent purchases.
Conversely, smaller wallets holding less than 0.01 BTC have been steadily increasing their positions as the price declined below $70,000 on Friday and into Saturday. Santiment analysts interpret this pattern as a warning sign, noting that when retail investors buy while whales sell, it often indicates that a correction is not yet complete.
The selling pressure is further compounded by data from Glassnode, which reveals that roughly 43% of the total bitcoin supply is currently held at a loss. This substantial portion of underwater supply creates a significant barrier to further price appreciation, as holders seek to break even rather than participate in a sustained rally. The $74,000 level proved to be a point of resistance, encountering selling from both profit-taking whales and investors looking to exit at their cost basis.
Investor sentiment has also soured, with the Crypto Fear and Greed Index falling six points to 12 on Saturday, placing it firmly in “extreme fear” territory. This is among the lowest readings since a market downturn in October 2024, reflecting widespread anxiety among investors.
The crypto market has exhibited significant intra-week price swings in recent weeks without establishing a clear trend. Bitcoin touched $60,000 on February 6 and reached $74,000 on March 5, but currently trades around $68,000, roughly its level three weeks prior. This pattern of substantial volatility coupled with minimal net movement suggests a market caught between competing forces.
The recent strikes by the U.S. And Israel on Iran have added to the uncertainty. According to reports, the strikes targeted multiple Iranian provinces, including areas near Tehran, prompting Iran to signal a “crushing response.” The broader market reacted swiftly, with Bitcoin falling below $64,000 before stabilizing. The total crypto market capitalization slipped to $2.38 trillion, reflecting a risk-off sentiment.
The situation is complicated by Iran’s growing reliance on cryptocurrency to circumvent international sanctions. A report by CoinDesk revealed that Iran has developed a $7.8 billion crypto shadow economy, utilizing state-sponsored bitcoin mining and stablecoins for international trade and as a financial lifeline for its citizens. This crypto infrastructure is particularly vulnerable to disruptions in the power grid, which is essential for energy-intensive mining operations. Crypto outflows from Iran’s largest exchange jumped 700% within minutes of the U.S.-Israeli airstrikes, according to on-chain data from Elliptic and Chainalysis.
As of Saturday, the market awaits Iran’s response to the strikes, with the potential for further escalation remaining a significant concern. The behavior of large bitcoin holders suggests a pessimistic outlook, while retail investors continue to navigate the volatile landscape.
