Bitcoin has gained about 7% from its Sunday lows, showing resilience even as traditional markets struggle to advance. Analysts say the move reflects easing selling pressure, shifting correlations with gold and improving inflows into spot bitcoin exchange-traded funds.
The largest cryptocurrency, Bitcoin, recently climbed to just under $71,000 after recovering from its Sunday evening dip. The rebound comes despite rising geopolitical tensions tied to the Iran conflict and broader macro risks, including potential disruptions to global oil supply and stress in private credit markets.
Compared with other major assets, bitcoin’s performance is starting to stand out. Both the Nasdaq-100 and the S&P 500 have remained largely flat during the same period, while Gold — often considered a safe haven in times of uncertainty — has only posted modest gains. So far this month, bitcoin is the only one among the three showing a clear rise.
Bitcoin also appears to be gradually diverging from its previously tight relationship with struggling software stocks. Over the past five days, iShares Bitcoin Trust (IBIT) has gained about 3.75%, while the iShares Expanded Tech-Software ETF has declined roughly 2.45%.
This divergence has prompted some analysts to cautiously suggest the crypto market may be stabilizing after months of weakness.
Signs of seller exhaustion
One positive signal, according to Aurelie Barthere, is bitcoin’s relatively muted response to new geopolitical headlines.
Earlier in the week, falling oil prices briefly lifted both equities and cryptocurrencies, as markets tentatively priced in a potential easing of tensions related to Iran. However, that optimism faded later in the session and risk assets gave back part of their gains.
Despite the reversal, bitcoin’s downside reaction remained limited. Barthere pointed out that some traditional benchmarks, including the Euro Stoxx 50, have fallen more sharply during the same period.
This resilience suggests the marginal seller in bitcoin may be less aggressive than those in equity markets.
Changing relationship with gold
Another shift catching traders’ attention is bitcoin’s evolving relationship with gold.
According to Bryan Tan of the crypto trading firm Wintermute, the correlation between bitcoin and gold has recently turned positive, moving to around +0.16 from -0.49 a week earlier.
At the start of the Middle East conflict, bitcoin declined while gold rallied — a typical risk-off market reaction. More recently, however, both assets have been rising together as the U.S. dollar weakens.
If this correlation continues to strengthen, it could change the narrative around bitcoin during periods of geopolitical stress, potentially shifting its perception from a purely risk-sensitive asset to something more nuanced.
ETF inflows improve
Another factor supporting bitcoin’s recent strength may be improving flows into spot bitcoin ETFs.
ETF flows had been trending negative for several months following the market peak in October. However, recent data suggests conditions may be improving.
According to Joe Edwards at Enigma, the past two weeks have shown a noticeable pickup in inflows, particularly into iShares Bitcoin Trust, the largest spot bitcoin ETF.
Those steady inflows indicate institutional demand may be stabilizing, giving analysts cautious optimism that the crypto market could be finding firmer ground even as broader macro uncertainty continues.
