Bitcoin worst quarter since 2018 as Fed, Iran pressure BTC ETF flows
Bitcoin logged its worst quarterly performance since early 2018, sliding about 22% in Q1 2026. After weakening around February, Bitcoin dropped to roughly $66,700 by quarter-end, with intraday losses reaching as much as 34.6%.
The selloff was mainly macro-driven. Escalation around the Iran conflict, tariff concerns, and a still-hawkish Fed hit risk appetite and tightened overall market liquidity. Compared with majors after the Feb. 28 Iran-war outbreak, Bitcoin fell less than gold (about -17%) and also underperformed the equity selloff (Nasdaq and S&P both around -7% to -8%).
Analysts frame this as a “macro-driven reset” rather than a structural break. Importantly for traders, U.S. spot Bitcoin ETF demand appears to have stabilized: assets are around $100B, and net inflows returned in March after earlier outflows. Improved liquidity and renewed ETF absorption may help markets digest larger swings.
Near-term direction depends on the next U.S. monetary-policy signals. Zeus Research expects a Fed pause or easing could loosen liquidity and support Bitcoin, while continued hawkishness could increase sell pressure. Rate-cut odds remain low, and geopolitical escalation risk stays in focus.
On top of demand/flow factors, supply signals also appeared. Miner Riot Platforms sold over $250M worth of BTC in Q1, reducing holdings to 15,680 BTC.
Traders should watch Bitcoin’s key range around $66,000–$70,000 and the next catalysts from Fed rhetoric, spot BTC ETF flows, and geopolitical headlines.
Bearish
Bitcoin’s Q1 drawdown was broad and macro-led, and both articles stress that the Fed remains the swing factor. With rate-cut odds low and geopolitical risks still active, liquidity conditions can stay tight, which historically raises selling pressure on Bitcoin. Even though the spot Bitcoin ETF narrative improved in March (supportive for demand), the quarter also featured additional supply from miners (Riot sold >$250M BTC), limiting upside.
Short-term, this keeps Bitcoin range-bound and sensitive to ETF flow print and Fed rhetoric (bullish relief rallies can fade quickly if hawkishness returns). Long-term, the “macro reset” framing suggests there may not be a permanent structural breakdown; however, until clearer easing expectations and sustained ETF inflows arrive, traders should expect choppy downside risk and consolidation around the $66k–$70k zone.