Following a mid-week rally above $68,000, Bitcoin retreated toward $70,000 by early March 6, 2026, erasing $110 billion in market capitalization amid worsening Iran conflict, rising oil prices, and a strengthening U.S. dollar. The pullback occurs despite ongoing institutional adoption, with $2.6 billion in Bitcoin options set to expire, heightening volatility risks.
Bitcoin's early March 2026 rally, which peaked above $74,000 after rebounding past $68,000 on March 2 despite initial Middle East strikes, gave way to a sharp pullback below $69,000 by week's end. This erased $110 billion in market cap, though the cryptocurrency hovered near the $70,000 level at times.
Institutional momentum continued with Morgan Stanley selecting Bank of New York Mellon as custodian for its spot Bitcoin ETF, bolstering Wall Street infrastructure. Kraken integrated with the Federal Reserve's payment system, while Intercontinental Exchange (NYSE owner) invested in OKX, valuing it at $25 billion. U.S. President Donald Trump urged banks to engage with crypto, amid his stance of 'no deal with Iran.' U.S. spot Bitcoin ETFs recorded $787 million in net inflows last week—the first positive since mid-January—plus $1.145 billion in early March. MicroStrategy added to its holdings with a major purchase.
Escalating geopolitical risks dominated, however. U.S. airstrikes and Iranian retaliation drove WTI crude above $83 per barrel (+5% in 24 hours) and Brent to $85 (+42% YTD), stoking inflation fears and rate hike speculation, including from the ECB. The U.S. Dollar Index topped 99, and 10-year Treasury yields hit 4.16%, fueling risk-off moves in stocks like MicroStrategy, Coinbase, and MARA.
Derivatives signaled caution: Bitcoin open interest reached $16.16 billion with negative funding rates; short-term holders moved 27,000 BTC ($1.8 billion) to exchanges; $257 million in liquidations hit longs; and implied volatility spiked. Notably, $2.6 billion in Bitcoin options across exchanges are slated to expire soon, priming for swings.
These developments cap a volatile week tied to the Iran conflict, following the prior rally amid initial escalation.
