Bitcoin traded near $68,000 on Tuesday as US spot exchange-traded funds (ETFs) recorded one of the strongest inflow days of the quarter on Monday, signaling that institutional investors may be viewing recent volatility as manageable rather than systemic.
According to data curated by SoSoValue, US spot bitcoin ETFs attracted $458 million in inflows on March 2, even as geopolitical tensions linked to the ongoing conflict with Iran continued to unsettle broader markets.
ETF inflows signal contained volatility
The robust inflows come after a period of heightened volatility over the weekend, when headlines surrounding the Middle East conflict triggered roughly $300 million in long liquidations.
Singapore-based trading firm QCP Capital said in a recent note that the liquidations were “notable but contained,” arguing that positioning had already been materially lightened in recent weeks.
Options markets also reflected a measured response.
QCP wrote that one-day implied volatility briefly spiked to 93% before quickly retracing, suggesting that traders were hedging short-term event risk rather than preparing for a prolonged escalation.
ETF flows have remained constructive in recent sessions.
SoSoValue data showed that US spot bitcoin ETFs added $1.1 billion over three consecutive sessions last week, with BlackRock’s IBIT accounting for roughly half of those inflows.
The combination of steady ETF demand and limited follow-through selling has helped stabilize Bitcoin around the $68,000 level despite persistent macro uncertainty.
Technical signals point to tactical shift
Market analysts say Bitcoin’s recent price behavior may indicate that downside pressure is easing, though they caution that the broader bear market structure remains intact.
“Bitcoin failed to accelerate lower on risk-off headlines, a signal that downside pressure may be losing momentum,” said 10x Research in a market update on Tuesday.
The firm noted that Bitcoin was reclaiming the 20-day moving average near $68,500 and that Bollinger Bands were tightening, with conditions “forming for potential range expansion.”
Bitcoin briefly climbed above $70,000 on Coinbase late Monday before retreating to around $68,400, according to TradingView data.
Analysts observed that the $62,500 level has held on three separate tests, “reinforcing it as meaningful support.”
They also pointed to improving momentum indicators.
“Bullish divergences are emerging,” with both RSI and stochastic indicators trending higher, “early signs that momentum may be stabilizing even within a broader bearish structure.”
Despite these developments, 10x Research emphasized caution.
The evidence “points to a meaningful tactical shift, but not yet a confirmed structural turn.” The firm added that while volatility is compressing, ETF flows have strengthened and the Coinbase discount has disappeared, “these are not characteristics of a market accelerating into a fresh leg lower.” Still, “our broader allocation framework still classifies Bitcoin as being in a bear market regime, meaning any bullish exposure remains tactical rather than structural.”
Funding rates and short squeeze dynamics
Other analysts attribute the recent rebound to derivatives positioning rather than a fundamental shift in trend.
Justin d’Anethan, head of research at Arctic Digital, said in a Cointelegraph report that recent price action suggests a move toward consolidation. “We’ve moved from frantic to somewhat measured,” he said, adding that the environment bodes well for “a consolidation, accumulation, or at least, a range-bound time.”
He noted that persistent selling pressure has had diminishing impact despite tariffs, war prospects, and previously disappointing rate cut expectations, suggesting that “sellers themselves are exhausted or that there are genuine buyers averaging in at these levels.”
Bitrue research lead Andri Fauzan Adziima said the fading downside momentum was “primarily due to deeply negative funding rates” in derivatives markets, which created “overcrowded short positions in perpetual futures and triggered a classic short squeeze as price bounced sharply from $63,000 lows, forcing heavy liquidations and easing selling pressure through tactical relief.”
However, he cautioned that no confirmed trend reversal has occurred “because structural inflows remain absent, macro catalysts are lacking,” and the broader downtrend from the all-time high “persists with fragile liquidity and resistance ahead.”
For now, Bitcoin appears to be stabilizing, but analysts remain divided on whether the recent rebound marks the start of a durable recovery or merely a tactical pause within a broader bearish cycle.
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