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Bitcoin Struggles Below $63K as ETF Outflows, Geopolitical Risks, and Bear Market Fears Intensify

Bitcoin (BTC) remains under heavy pressure at the start of the week, trading below the $63,000 mark after recording its worst weekly performance of 2026. The world's largest cryptocurrency continues to face multiple headwinds, including sustained institutional selling, escalating geopolitical tensions in the Middle East, and growing concerns that the current market cycle could be following a path similar to the devastating 2021-2022 bear market.

A key factor behind Bitcoin's weakness has been the sharp decline in institutional demand. According to recent ETF flow data, spot Bitcoin ETFs experienced net outflows of approximately $1.72 billion last week, marking the fourth consecutive week of substantial withdrawals. The continued capital flight from Bitcoin investment products suggests that large investors remain cautious despite the significant correction already seen from last year's highs. Persistent outflows of this magnitude often reduce market liquidity and can amplify downside pressure during periods of uncertainty.

Beyond institutional selling, global risk sentiment has deteriorated significantly as tensions between Israel and Iran continue to escalate. The conflict has entered a more dangerous phase, with both nations exchanging missile strikes and military operations across multiple fronts. Concerns that the conflict could spread further across the region have increased investor demand for traditional safe-haven assets such as the US Dollar while reducing appetite for higher-risk investments, including cryptocurrencies.

As geopolitical uncertainty intensified, Bitcoin dropped to a weekly low near $59,130, highlighting its vulnerability during periods of market stress. Although Bitcoin is often promoted as a hedge against traditional financial risks, recent price action suggests that investors continue to treat it as a risk-sensitive asset, similar to technology stocks and other growth-oriented investments.

Adding to the negative sentiment, Strategy's recent disclosure that it sold 32 BTC between May 26 and May 31 generated considerable discussion throughout the crypto market. The transaction, valued at roughly $2.5 million, represented only a tiny fraction of the company's total holdings of 843,706 BTC. However, the sale attracted attention because it marked Strategy's first net Bitcoin sale since December 2022.

While the transaction itself was insignificant from a balance-sheet perspective, the symbolic impact was much larger. Michael Saylor and Strategy have long been viewed as some of Bitcoin's strongest corporate supporters. As a result, any reduction in holdings can trigger fear, uncertainty, and doubt among market participants, especially during an already fragile market environment. The announcement contributed to growing concerns that institutional confidence may be weakening as Bitcoin struggles to establish a sustainable recovery.

From a technical standpoint, Bitcoin's current market structure bears striking similarities to the 2021-2022 bear market cycle. During that period, Bitcoin reached an all-time high near $69,000 before eventually collapsing more than 77% over the following year. After finding a bottom near $15,500, the market entered a lengthy consolidation phase before beginning a new bullish trend in 2023.

The current cycle shows several comparable characteristics. Bitcoin reached a record high of $126,199 in October 2025 before entering a prolonged correction. The asset subsequently declined more than 52%, reaching lows near $60,000 earlier this year. Although BTC managed to stage a recovery toward the 100-week exponential moving average around $82,000, the rally failed to generate a bullish breakout and was ultimately rejected. Many analysts now view that recovery as a potential bull trap that temporarily attracted buyers before the broader downtrend resumed.

Since the rejection near the 100-week EMA, Bitcoin has fallen more than 23% and recently printed a fresh swing low at $59,130. This continued weakness has reinforced concerns that the market may still be in the middle stages of a larger bearish cycle rather than approaching a final bottom.

If Bitcoin continues to follow the trajectory of the 2021-2022 bear market, further downside cannot be ruled out. Historical comparisons suggest that a decline toward the $28,300 region remains possible, representing a correction of approximately 77.5% from the October 2025 peak. While such a scenario may appear extreme, previous Bitcoin bear markets have demonstrated the asset's capacity for deep retracements before eventually establishing a long-term bottom.

For now, traders and investors will closely monitor ETF flows, geopolitical developments, macroeconomic conditions, and key technical levels for clues about Bitcoin's next major move. Until institutional demand returns and risk sentiment improves, the broader trend is likely to remain tilted to the downside.

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