Bitcoin’s resilience during the latest round of global macro stress is beginning to turn heads on trading desks.
The biggest crypto rose to just $71,000, up about 7% from Sunday night’s lows, even as geopolitical tensions escalated over the Iran conflict and markets grappled with risks ranging from oil supply disruptions to stress on private credit markets.
The relative strength begins to stand out. The Nasdaq 100 and S&P 500 have been roughly flat at the same time, while gold – typically a safe haven during turmoil – has only made modest gains. Looking at the performance so far in March, BTC is the only one of the three to post gains.
Bitcoin is also showing early signs of breaking away from its close association with embattled software stocks. Over the past five days, BlackRock’s spot bitcoin ETF (IBIT) is up 3.75%, while the iShares Expanded Tech-Software ETF (IGV) is down 2.45%.
The price action has analysts cautiously optimistic that the crypto market may finally stabilize after months of decline.
Selling exhaustion
Aurelie Barthere, lead research analyst at Nansen, said an encouraging signal is how little BTC has reacted to new geopolitical headlines.
Earlier this week, a brief wave of optimism lifted stocks and crypto along with softer oil prices, suggesting markets were tentatively pricing in a potential de-escalation in the Iran conflict. However, as the session progressed, this optimism faded and risk assets gave back some of their gains.
“Bitcoin’s downside sensitivity has been relatively limited,” she said, noting that some traditional benchmarks such as the Euro Stoxx index have fallen more sharply over the same period.
That resilience suggests the marginal seller in bitcoin may be less aggressive than in stocks, Barthere added.
Shifting correlation with gold
Another shift that is catching traders’ attention is bitcoin’s changing relationship to gold.
According to Bryan Tan, trader at crypto trading firm Wintermute, the BTC-gold correlation has turned positive, moving to +0.16 from -0.49 a week ago.
In the initial phase of the Middle East conflict, bitcoin fell while gold rose in a classic risk-off move, Tan noted. Recently, both assets have risen together while the US dollar has weakened, suggesting that investors may begin to treat them as beneficiaries of dollar softness rather than resisting risk trades.
“If this correlation continues to develop positively, it will shift the narrative around BTC in a conflict environment from ‘sell the risk asset’ to something more nuanced,” Tan said.
ETF flows back
Improving bitcoin ETF flows could also support the recent strength.
Bitcoin ETF flows had been negative for several months after peaking in October. But data from the past two weeks shows a notable improvement, noted Joe Edwards, head of research at Enigma, particularly with consistent inflows into BlackRock’s IBIT fund, the largest of the bitcoin ETFs.
A sustained upswing in ETF demand could be critical for bitcoin, he added. A sustained upswing in ETF demand could be critical, he added. Many analysts believe that bitcoin’s next phase of growth depends on access to deeper institutional capital pools, such as ETF investors in brokerage accounts. With that in mind, the latest wave of outflows was troubling, Edwards said.
The “good news,” he said, is that there are signs that that period is ending.
IBIT has attracted nearly $1 billion in fresh inflows so far in March, after shedding more than $3 billion between November and February, SoSoValue data shows.
If the trend holds through the coming weeks, Edwards argued, it could support a broader bitcoin recovery in the second quarter.
