Bitcoin prices recovered to around $73,000 in early March after dropping to the mid-$60,000s since late January due to geopolitical unrest.
What the data says
CryptoQuant reports that Bitcoin’s significant price volatility in the first quarter of the year appears to have direct geopolitical correlation. Bitcoin fell to around $63,000 on February 29, following the US-Israeli military attack on Iran on February 28 and Iran’s escalation of tensions in the Middle East. BTC recovered to near $70,000 by March 2nd and by March 4th and 5th the price had risen to $73,000 due to strong buying pressure.
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Geopolitics in the price of Bitcoin
CryptoQuant highlights the classic short squeeze dynamics on the derivatives side. A short squeeze occurs when the price of an asset rises suddenly and upward, forcing traders to buy back their shorts as the price reverses. As sellers move out, the price goes up further due to liquidation.
Funding rates turned negative and futures open interest rose during the session, indicating that many traders are opening or adding to short positions in Iran headlines.
Bitcoin price on Coinbase Premium Index. Source: CryptoQuant
As the conflict did not escalate further and demand for the ETF remained positive, Bitcoin price rose, causing late shorts to be liquidated and funding to move towards neutral, rising to the high ‑$60K / $70K area. In the words of CryptoQuant, this episode looks like a temporary blip and positioning at the top of an existing trend, not the start of a new war mode.
Bitcoin: Open Interest - All Exchanges, All Symbol. Source: CryptoQuant
The sell-off related to Iran was primarily a flow event rather than a structural change in the behavior of holders: it was less about “investors fleeing” to safety and more about how positioning and liquidity interacted around the shock.
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A larger picture
This episode is not extreme, but part of the pattern of Bitcoin price behavior on the chain between major conflicts. From Ukraine and Gaza to the recent crisis in Venezuela, they all show the same signature: a sudden spike and fear in coins to the stock market around the event window, followed by a quick stabilization to the initial level as the price anchor returns to its previous trajectory. This is exactly what happened during the escalation in Venezuela, where military headlines increased intraday volatility, but failed to trigger a sustained divisive phase or structural trend change.
Wars and geopolitical conflicts put short-term pressure on flows, but once the initial panic fades, Bitcoin tends to return to the macro trend that was already in place.
BTC's price trends to the downside on the daily chart. Source: BTCUSD on Tradingview
Cover image from ChatGPT, BTCUSD chart from Tradingview
