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Bitcoin's image/ Photo via Reuters, Yonhap

Bitcoin has retreated to the $73,000 range, sliding to its lowest level in six weeks. A broad-based wave of risk aversion—triggered by escalating military friction between the United States and Iran—coupled with an exodus of institutional capital has exacerbated volatility across the aggregate digital asset ecosystem. While market analysts warn of near-term downside risks, they maintain that the cryptocurrency's mid-to-long-term growth narrative remains intact.

According to data from US digital asset exchange Coinbase, Bitcoin was trading at $73,482 as of 11:00 AM on May 29, ticking down 0.98% from the prior day. The benchmark token has shed 5.21% compared to its valuation one week ago.

Major altcoins exhibited synchronized weakness during the same trading window. Ethereum edged down 0.47% to change hands at $2,005, while Solana slipped 0.08% to $82.10.

Market analysts pinpoint heightened geopolitical risks in the Middle East as the primary catalyst dragging down crypto valuations. On May 27 (local time), US forces executed airstrikes targeting southern Iran, prompting a retaliatory strike by the Islamic Revolutionary Guard Corps (IRGC) aimed at US military installations stationed in Kuwait. Tehran subsequently warned that any further escalations would meet a "far more decisive response."

The military flare-up triggered a sharp spike in international crude oil prices, sparking a sudden sell-off across high-beta risk assets including Bitcoin. Despite ongoing diplomatic negotiations between Washington and Tehran, the recurrence of active military friction has frozen investor sentiment, driving capital out of risk-exposed holdings and into safe-haven assets.

The downturn was further aggravated by a noticeable cooling in institutional capital flows. Spot Bitcoin exchange-traded funds (ETFs) have registered sustained net outflows for several consecutive weeks. Notably, BlackRock’s spot Bitcoin ETF posted a massive single-day net outflow of $527.84 million (approximately 740.0 billion won) yesterday, marking the second-largest single-day redemption since the investment vehicle debuted in January 2024.

Market strategists project that crypto asset prices will remain highly sensitive to the unfolding geopolitical dynamics between the US and Iran, the Federal Reserve’s monetary policy trajectory, and institutional ETF liquidity flows in the near term. "Bitcoin has entered a consolidation phase where its price action is highly sensitive to macroeconomic variables and shifts in institutional supply-demand dynamics," noted Markus Thielen, founder of 10x Research, in a recent market commentary. "We expect elevated volatility to persist until we see a meaningful resurgence in spot ETF inflows."

Nevertheless, institutional outlooks regarding the asset class's multi-year arc remain structurally optimistic. "Despite the current price correction, the long-term investment thesis underpinning Bitcoin has not been compromised," remarked Geoff Kendrick, head of digital assets research at Standard Chartered. "Once institutional capital inflows resume, the cryptocurrency is highly likely to reclaim its macro upward trajectory." Similarly, an analyst team led by Alex Saunders at Citigroup previously projected a 12-month base-case target for Bitcoin at $143,000, with a bullish scenario extending up to $189,000.

                                                                                                                Kim Min-ju