The cryptocurrency market bounced back at the start of the new week after briefly dipping into a fear-driven slump over the weekend. With geopolitical tensions casting a shadow over global markets, crypto capitalisation fell to $3.03 trillion before rebounding to $3.12 trillion as investor confidence returned.
According to market analysts, the weekend dip was largely triggered by speculation surrounding U.S. military action in Iran, which led traders to anticipate a broader sell-off. However, the muted response from traditional financial markets appeared to reassure crypto investors, prompting a wave of buying activity that drove market capitalisation higher.
Fear Index Rebounds as Bitcoin Holds Key Support
The Crypto Fear and Greed Index, a key barometer of market sentiment, dropped to 42 on Sunday, its lowest reading in two months. By Monday, however, it had risen to 47, pulling the market out of the “fear” zone and back into neutral territory.
Bitcoin, the market bellwether, slipped to a weekend low of $98,000, marking a test of the 61.8% Fibonacci retracement level from its April-May rally. But the decline was short-lived. By early European trading on Monday, BTC had recovered to nearly $102,000, narrowing the gap with its $102,700 mark at the start of Sunday.
Despite the recovery, Bitcoin still remains below its 50-day moving average, which was breached during last week’s downturn. This technical break, driven by external events rather than intrinsic market weakness, suggests that any decisive move outside the $96,000–$105,000 range could signal the next significant directional trend.
ETF Inflows Slow but Show Long-Term Strength
While market sentiment improved, inflows into U.S.-listed spot Bitcoin exchange-traded funds (ETFs) showed signs of cooling. According to SoSoValue, net inflows into spot Bitcoin ETFs fell to $1.02 billion last week. Nevertheless, total inflows since the historic approval of these products in January 2024 have now reached $45.61 billion, underscoring continued institutional interest.
Ethereum ETFs also experienced a slowdown, with net inflows dropping to $40.2 million. Since their launch in July, spot ETH ETFs in the U.S. have brought in a cumulative total of $3.89 billion. While last week’s figure marked a significant drop, the overall trajectory still reflects positive institutional engagement with the second-largest cryptocurrency.
Network Activity Slows as Whales Take the Lead
Blockchain data also painted a nuanced picture of market behaviour. Glassnode, a leading crypto analytics platform, reported a decline in daily Bitcoin transactions, attributing the slowdown primarily to a sharp drop in non-financial transactions.
The data also pointed to a rising concentration of activity among large-scale investors. “There is a growing dominance of large players in the Bitcoin network,” Glassnode observed, suggesting that high-net-worth holders and institutional investors are exerting increasing influence over price and liquidity dynamics.
South Korea and Kraken Drive Positive Newsflow
Despite recent volatility, the broader crypto ecosystem continues to evolve. In Asia, South Korea’s government unveiled a roadmap for the approval of spot cryptocurrency ETFs. Regulatory preparations are expected to take shape in the second half of 2025, marking a potential milestone for broader adoption in one of the world’s most active crypto trading regions.
Meanwhile, U.S.-based Kraken exchange announced a new Bitcoin staking feature in partnership with Babylon’s BTCFi project. The integration enables users to earn staking rewards without relying on bridges or tokenized “wrapped” assets. Importantly, the programme ensures that customer funds remain on the Bitcoin blockchain and fully under user control, a move aimed at reinforcing trust amid growing concerns over security and asset custody in decentralised finance.
A Market on the Edge of Transition
While the cryptocurrency market remains sensitive to macroeconomic and geopolitical developments, the quick rebound in sentiment and strong ETF inflows suggest a resilient foundation. With Bitcoin stabilising around the $102,000 mark and investors buying on dips, the mood appears cautiously optimistic.
Whether the market continues to climb or tests new lows will likely hinge on both external triggers and internal adoption trends. For now, the fear has passed but the next breakout, in either direction, could be just around the corner.
