Bitcoin Climbs Back to $63K Amid ETF Withdrawals and Middle East Strife

Bitcoin has nudged higher to around $63,000 after suffering a heavy 18% drop last week, marking its poorest weekly performance of 2026. The world's leading cryptocurrency appears to be treading water as institutional investors continue offloading their holdings.

Recent data reveals sustained selling from institutional players, notably through spot exchange-traded funds (ETFs) which saw outflows totaling $1.72 billion last week-the largest weekly withdrawal in over a year. Over the past month, spot ETFs have endured a cumulative $5.4 billion in outflows, signaling cautious sentiment among major crypto holders.

This retreat in digital assets coincides with heightened geopolitical uncertainty. Military exchanges between Iran and Israel have reignited conflict concerns, unsettling markets broadly and encouraging risk-off behavior that has pressured cryptocurrencies.

At the same time, some investors have shifted their focus towards equities infused with artificial intelligence exposure, attracted by the momentum in AI-driven sectors. Bitcoin's brief respite in price came as the AI rally lost steam toward the end of last week and into Monday.

Altcoins showed mixed fortunes amid this backdrop. Ethereum, the second-largest cryptocurrency, bounced back 3.4% to around $1,666, recovering from a sharp drop close to 20%. XRP and Solana were both up approximately 1.3%, while Cardano and Binance Coin posted smaller gains.

Meanwhile, the military skirmishes in the Middle East intensified with air strikes between Iran and Israel, dampening global risk appetite. U.S. President Donald Trump urged restraint, suggesting possible peace talks, but recent cross-border strikes have dimmed hopes for de-escalation, triggering a jump in oil prices and rattling markets.

Additionally, stronger-than-forecast U.S. employment figures have raised speculation of sustained or increased Federal Reserve interest rates, a headwind for speculative assets that don't yield income, including cryptocurrencies. This put extra pressure on the crypto market amid the fragile recovery.

On the memecoin front, Dogecoin saw a modest uptick under 1%, while the $TRUMP token climbed 2%, reflecting ongoing niche interest despite the broader turbulence.