By Sofia Navarro - Bitcoin saw a modest recovery on Monday, climbing after a pronounced selloff the prior week, though underlying market fragility persisted amid continued institutional exits and renewed geopolitical tensions in the Middle East.
Bitcoin was trading up 1.5% at $63,053.7 by 02:23 ET (06:23 GMT). The cryptocurrency suffered a near 18% decline over the previous week, marking its worst weekly performance so far this year.
Institutional flows were a central factor in the recent weakness. U.S. spot Bitcoin exchange-traded funds experienced an outflow of $1.72 billion last week, the largest weekly withdrawal since April 2025, according to data from aggregator SoSoValue. That outflow extended a sequence of withdrawals: spot ETFs recorded a fourth consecutive week of net redemptions, amounting to a combined $5.4 billion over the four-week span.
Market participants attributed part of the selling pressure to a cooling appetite for crypto among institutional investors, a shift that coincided with heightened risk aversion linked to the Iran conflict and its potential implications for interest rates.
Another dynamic shaping flows was a rotation of investor interest toward equities with artificial intelligence exposure. Optimism around AI had drawn capital away from crypto, but Bitcoin found a degree of relief when the AI-driven rally cooled off on Friday and into Monday.
Wider crypto market moves
Across the digital-asset landscape, prices were largely higher on Monday, reflecting Bitcoin's mild rebound. However, broader gains were constrained by persistent risk-off sentiment, particularly after a resurgence of military exchanges in the Middle East.
Ether, the second-largest cryptocurrency, rose about 3.4% to $1,666.44, recovering from an almost 20% loss. XRP and Solana each gained roughly 1.3%, while Cardano and BNB increased about 0.4% and 1.3%, respectively. In the memecoin space, Dogecoin advanced 0.8% and the $TRUMP token added 2%.
Geopolitics and macro risks
Geopolitical developments added to market unease. Iran and Israel exchanged air strikes on Sunday evening amid heightened tensions tied to Tehran's anger over Israel's actions in Lebanon and against Hezbollah. The report noted that Israeli strikes on Iran occurred even as U.S. President Donald Trump called for restraint and suggested a peace deal with Tehran could still be possible.
Despite that public call for restraint, the article highlighted that escalating military actions - which included strikes exchanged between the U.S. and Iran over the prior week - had undercut hopes for de-escalation. That deterioration in the security outlook pushed oil prices higher and unsettled broader markets.
Concurrently, stronger-than-expected U.S. nonfarm payrolls published on Friday heightened concern that the Federal Reserve may have room to raise or maintain elevated interest rates. The piece emphasized that a firmer labor market could give policymakers more latitude to tighten, a prospect that tends to weigh on non-yielding, speculative assets such as cryptocurrencies.
Outlook
The market backdrop described combines continued institutional selling from spot ETFs, geopolitical risk that has pushed commodity prices and investor caution higher, and macro data that increases the odds of a less accommodative interest-rate path. Those dynamics together help explain why Bitcoin’s modest recovery on Monday left the market feeling tentative rather than decisively bullish.