Bitcoin opened Monday last week at $65.7K and rallied all the way to touch $74K by Wednesday, accounting for an over 12% rise. This momentum was supported by strong demand from spot Bitcoin ETFs, which recorded around $460 million in inflows on Monday followed by two more consecutive net positive days until midweek. This momentum, however, did not carry through till the end of the week. Thursday and Friday saw cumulative net outflows of around $576 million and Bitcoin slipped back to around $67.4K. The reason for such a turbulent week for Bitcoin was purely due to the macro environment. In the span of a few days, the U.S. economy lost 92,000 jobs, far worse than expected and this signalled the sharpest labor market collapse since the pandemic. At the same time, oil prices rose over $115, peaking at $119.48, and currently over 45% up since the start of the U.S. – Iran conflict and disruptions in the Strait of Hormuz. The result is a scenario with almost no modern precedent: a stagflationary shock where rising oil prices threaten to reignite inflation even as employment plummets. Despite the macro chaos, crypto’s own market structure is hinting at a rare signal. Negative funding rates across major perp markets show that traders are heavily on the short side, a setup that has often shown itself as a major reversal in previous cycles. Bitcoin’s $74K Rally Died in 3 Days – the ETF Flow Reversal Tells the Story The start of last week looked very promising for Bitcoin, but the price action and institutional positioning since Wednesday 4th March is very telling about the real macroeconomic risks on the table. After prices reached a low of $63K as the news of the conflict broke out on February 28, Bitcoin rose by roughly 17% to reach a high of $74K by midweek. The momentum was largely influenced by Spot ETF demand as well as short positions being wiped out, specifically on March 4 that saw over $478 million short liquidations according to CoinGlass. On Monday, Spot Bitcoin ETFs recorded $458.2 million in inflows, followed by $225.2 million on Tuesday and $461.9 million on Wednesday, adding up to a total of around $1.15 billion in inflows over the three days. However, this momentum did not carry through till the end of the week as institutional demand waned over Thursday and Friday. While the week still closed with a net positive in inflows to Spot Bitcoin ETFs, Thursday and Friday registered a combined outflow of around $576 million, coinciding with BTC falling back to around $67.4K. The macroeconomic news that came out midweek was the primary catalyst for this reversal. The February U.S. Jobs report that came out on March 6 caught the markets off guard with a loss of 92,000 jobs as opposed to the expectations of a 55,000 gain, while the unemployment rate rose to 4.4%. An even more concerning data point is that prior months were revised down by 69,000 jobs, meaning the labour market created 161,000 fewer jobs than previously reported. The early momentum and the reversal we saw in BTC ETF flows last week is actually telling of what likely happened behind the scenes. Institutions bought the midweek momentum and sold off rapidly as the macro data deteriorated. This was a clear signal of institutional repositioning. Meanwhile, ZX Squared Capital founder CK Zheng warned that BTC could decline a further 30% from here, stating that the classic four-year cycle is intact, driven by predictable investor behaviour of “buying during hype and selling during panic”. Bitcoin is already around -47% from its October 2025 all time high of $126K, a move broadly in line with the severity seen in previous bear market declines. When we look at the broader crypto market, altcoins have been hit harder. The TOTAL2ES (which tracks the total altcoin market cap excluding stablecoins) is down roughly -56% during the same period, pushing BTC dominance to 58.85% at the time of writing. Total 2 excluding stablecoins Why Oil Over $100 Matters for Bitcoin – This Isn’t 2022’s Spike The speed at which oil prices have skyrocketed since the start of the conflict reflects a deeper structural shock in global energy markets. WTI crude is up nearly +38% over the past week, touching a high of $119.48 per barrel today, while Brent crude has climbed about +35% over the same period, now at $106. To put the speed of this move into perspective, oil was trading at near $85 on Thursday, by Sunday evening prices had rallied above $115. The volatility in price, however, does not capture the severity of the situation. Iraq, OPEC’s second largest producer, has seen output from its three largest southern oilfields decline by around 70% from 4.3 million barrels per day to 1.3 million after disruptions and closures in the Strait of Hormuz. In 2025, more than 13-14 million barrels of crude flowed through this passageway every single day, making it roughly 31% of global seaborne crude flows, according to data from market intelligence firm Kpler . Shocks like this to energy supply and oil prices have a direct impact on Bitcoin because they can trickle into inflation monetary policy very quickly. Historically, every $10 increase in crude oil tends to add around 25 cents to gas prices and this directly impacts consumer inflation and ultimately complicates central bank policy. With oil now trading above $100, the inflationary pressure nudges the Federal Reserve to opt for a more of a holding pattern of maintaining tighter liquidity conditions which is not favourable for risk assets like crypto. The big difference from previous spikes in oil prices is that this conflict is about physical supply chains and infrastructure required to move oil globally breaking down. During the Russia-Ukraine shock in March 2022, oil briefly rose toward $130 per barrel, yet production from the largest exporters remained largely intact. This crisis, however, is structurally different with the collapse in Iraqi output and the effective closure of the Strait of Hormuz. Political signals from the U.S. also suggest little immediate relief. President Donald Trump has described higher energy prices as a “small price to pay” for defeating Iran, while investment banks such as Goldman Sachs warn that if the strait remains closed, the shock could become the most severe oil supply disruption since the 1973 oil embargo. That said, there are some early signs of international coordination taking place. According to reports from the Financial Times, G7 countries are exploring a joint release of 300-400 million barrels from strategic petroleum reserves to provide some relief from supply pressures and calm markets. In response to this news, oil prices are back below $103 per barrel. The Contrarian Case – Why the Worst Macro in Years Might Be Bullish for Bitcoin This macro situation now puts the Federal Reserve in a very precarious spot. The probability that the Fed will maintain rates is at 96% according to the CME FedWatch tool . The problem, however, is that the signals coming from the economy are moving in opposite directions. The rapid increase in oil prices on the one hand puts inflationary fears back on the table, yet the unexpected data from the jobs report this past week points to a rapidly weakening labour market. These diverging points on the macro front are leading to a textbook stagflation scenario and historically it has forced the Fed to choose between fighting inflation or supporting growth. For instance, in 2008, when oil rose to $147, the Fed quickly pivoted from tightening to rate cuts within months. During the 1990 Gulf War oil shock, it cut rates six times within a year. In both these cases, the change in policy did not come because inflation was under control, but simply because economic damage became too severe to ignore. This is where the contrarian case for Bitcoin starts to emerge. Arthur Hayes, the co-founder and former CEO of BitMex, has long argued that geopolitical shocks and now with the Iran conflict that has triggered global energy supply disruptions combined with the collapsing job growth would provide the perfect macro stress and impetus for the Fed to cut rates. At the same time, a rare contrarian signal is also appearing within the crypto markets. Data from Binance perpetual futures is showing negative funding rates across major assets. For instance BTC funding rate stands at -0.0045%, meaning short sellers are paying long holders to maintain their position. This is indicative of an overcrowding toward shorts and extreme bearish positioning like this, have in the past, resulted in major turning points such as the March 2020 recovery, June 2022 cycle low and the October 2024 reversal. If Brent crude remains above $100 for an extended period of time or continues rising amidst a weakening labour market, the Fed may be forced to cut rates before reaching their 2% inflation target. In such a setting, Bitcoin will likely almost immediately react and shift from being a risk asset under a tightening environment to an asset that benefits from monetary easing. What Bitcoin Traders Should Watch This Week Any hints of whether Bitcoin has a positive or negative trend on its side will be through ETF flows early on in the week. After the sharp reversal last week, Monday and Tuesday’s data will show a lot on whether institutions are seeing the current back to $67K as a buying opportunity or the start of a broader de-risking phase. ETF flows have become a real time sentiment gauge on how smart money is viewing Bitcoin, so the first two trading days will likely reveal a lot for how the rest of the week might pan out. Traders will also be keeping a close eye on the CPI report which comes out on March 12. This will be the final inflation reading before the FOMC meeting scheduled for March 18. If inflation comes in hotter than expected, especially with oil trading above $100, this would strengthen the stagflation narrative and would weigh heavily on Bitcoin and the broader crypto market. On the flipside, in case inflation comes in cooler, markets will likely experience a temporary relief signal. From a technical perspective, $65,000 remains the key support level, with analysts warning that a decisive break could open the door toward the $60K region, while reclaiming $70K would signal the recent sell-off has been absorbed. At the same time, traders should watch derivatives markets closely. If negative funding rates persist through the start of the week while price stabilizes, it would strengthen the contrarian reversal setup. However, if funding flips positive while prices continue falling, the short-squeeze thesis begins to weaken and could signal that the market still has further downside to explore.
