US-Iran geopolitical tensions are escalating with fresh strikes launched despite ongoing peace efforts, creating risk-off conditions across markets. Bitcoin is trading at six-week lows near $73-74k amid record ETF outflows ($291M) for the 7th consecutive day, while traditional markets show resilience with SPX +0.22% and VIX at calm 15.3 levels. Key risk today is the 10:00 UTC ISM Manufacturing PMI (forecast 53.3) which could amplify volatility if it misses expectations.
Crypto markets are displaying clear institutional distribution with BTC ETF outflows hitting record levels, led by IBIT's $266M exit. DeFi activity is subdued with DEX volumes 15.2% below weekly averages at $5.05B, while stablecoin supplies contract (USDT -0.74%, USDC -0.61% weekly), indicating reduced market participation. The Aave $230M rsETH exploit has added to risk-off sentiment in DeFi protocols.