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BTC Hits $70K With Steady Flows as Bitcoin Holders Remain Calm in a Tense Climate

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Nexo Partners with Bakkt for US Crypto Exchange and Yield Programs

TLDR

  • Bitcoin moved near $70,000 while holders showed no panic during rising Middle East tensions.
  • Short-term holder loss transfers dropped to a 2- week low as selling pressure eased.
  • Realized losses fell to 3,700 BTC even as geopolitical risks increased across the region.
  • BTC derivatives showed reduced risk as Binance open interest declined by 25 %.
  • The leverage ratio reached a low weekly average that aligned with ongoing deleveraging.

Bitcoin traded near $70,000 on Monday as war fears grew across the Middle East, and the market held steady and pushed higher. Traders watched exchange activity closely because short-term flows shifted again. The latest chain data showed cooling loss-driven selling, and futures activity kept falling as open interest reset lower during the session.

Short-term Flows Shift as Loss Transfers Fall

Short-term holder loss transfers dropped to a two-week low, and this shift aligned with slowing exchange flows across major venues. Realized losses fell to 3,700 BTC on March 1 as tensions rose, and traders kept BTC above $63,000 as inflows stayed muted.

The reduction contrasted with early February, and that period saw 89,000 BTC sent at a loss within one day. Analysts said the current environment showed reduced stress and “zero panic,” and loss-driven inflows kept compressing into March.

This decline showed less pressure from recent buyers, and the market tracked whether losses would surge again. The steadier flows set a calmer tone, and traders watched if the pattern would hold under geopolitical pressure.

Bitcoin Holders Watch Liquidity Bands

BTC moved through $70,000 on the four-hour chart, and the price approached liquidity between $70,000 and $71,500. Traders said this area could turn into support, and they pointed to past supply reactions near $80,000.

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Analysts highlighted growing clusters near the range highs, and these pockets sat between $70,000 and $73,000. They said these areas often pull price when they grow, and the market kept scanning for reactions.

Spot flows supported the move, and Binance recorded $7.79 million in positive delta during the breakout. Coinbase added $1.16 million, and OKX logged $3.7 million, and this pattern pointed to steady spot demand.

The activity showed stronger bidding across venues, and the move came while leverage decreased again. Traders then turned to the $71,500 band, and they watched for a reaction if buyers held the zone.

Derivatives Reset as Leverage Drops for Bitcoin holders

Futures data showed a clear reduction in risk, and analysts tracked a 25% contraction in Binance open interest since the year began. The metric fell from 130,800 BTC to 97,680 BTC, and the reset aligned with calmer positioning.

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The estimated leverage ratio slipped to a 0.146 weekly average, and past cycles tied low readings with heavy deleveraging. This trend revealed a lighter market structure, and traders monitored the shift as BTC tested key monthly metrics.

BTC attempted to reclaim its Monthly RVWAP in the high-$68,000 zone, and trading above it placed the month’s average buyer in profit. Analysts said this move often changes positioning, and they watched to see if BTC could stabilize above the level.

The session ended with BTC near the $71,500 liquidity band, and the market focused on spot flows as the price tested the region.

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Crypto World

Aave’s TVL Falls $8B After $293M Kelp DAO Hack

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Aave’s TVL Falls $8B After $293M Kelp DAO Hack

Total value locked on decentralized lending protocol Aave dropped by nearly $8 billion over the weekend after hackers behind the $293 million Kelp DAO exploit borrowed funds on Aave, leaving roughly $195 million in “bad debt” on the protocol and triggering withdrawals.

Data from DeFiLlama shows that Aave’s TVL fell from about $26.4 billion to $18.6 billion by Sunday, losing the top spot as the largest DeFi protocol. 

Aave v3’s lending pools for USDt (USDT) and USDC (USDC) are now at 100% utilization, meaning that more than $5.1 billion worth of stablecoins cannot be withdrawn until new liquidity arrives or borrows are repaid. 

$2,540 is available to be withdrawn from the $2.87 billion USDT pool on Aave v3 at the time of writing. Source: Aave

Aave’s TVL fall shows how rapidly risk from a single security incident can spread throughout the broader, interconnected DeFi lending market, potentially leading to a severe liquidity crisis.

The incident began on Saturday when hackers stole 116,500 Kelp DAO Restaked ETH (rsETH) tokens worth about $293 million from Kelp DAO’s LayerZero-powered bridge and used them as collateral on Aave v3 to borrow wrapped Ether (wETH).

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Crypto analytics platform Lookonchain said the move created about $195 million in “bad debt” on Aave, which contributed to the Aave (AAVE) token tanking nearly 20% from $112 on Saturday at 6:00 pm UTC to $89.5 about 25 hours later. 

Lookonchain noted that some of the largest crypto whales to withdraw funds from Aave were the MEXC crypto exchange and Abraxas Capital at $431 million and $392 million, respectively.

Source: Grvt

Several crypto networks and protocols tied to rsETH or the LayerZero bridge have paused use of the bridge until the problem is resolved, including DeFi platform Curve Finance, stablecoin issuer Ethena and BitGo’s Wrapped Bitcoin (WBTC).

Aave has frozen several rsETH, wETH markets

Shortly after the Kelp DAO exploit, Aave said it froze the rsETH markets on both Aave v3 and v4 to prevent any suspicious borrowing and later stated that rsETH on Ethereum mainnet remains fully backed by underlying assets.

WETH reserves also remain frozen on Ethereum, Arbitrum, Base, Mantle and Linea, Aave said.

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This incident marks the first significant stress test of Aave’s “Umbrella” security model, which was introduced in June 2025 to provide automated protection against protocol bad debt while enabling users to earn rewards.

Related: Aave DAO backs V4 mainnet plan in near-unanimous vote

Earlier this month, the Bank of Canada found that Aave avoided bad debt in its v3 market by using overcollateralization, automated liquidations and other strategies that shifted risk to borrowers.

In comments to Cointelegraph, Aave defended its liquidation-based model, framing it as a core safety mechanism that protects lenders while limiting downside for borrowers.

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It comes as Aave parted ways with its longest-standing DeFi risk service provider, Chaos Labs, on April 6, following disagreements over the direction of Aave v4 and budget constraints.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?