Bitcoin has risen roughly 7% from its Sunday lows, demonstrating resilience even as traditional markets struggle to gain momentum. Analysts say the move reflects signs of seller exhaustion, changing correlations with gold and improving flows into spot bitcoin exchange-traded funds.
The largest cryptocurrency, Bitcoin, recently traded just below $71,000 after rebounding from its Sunday evening dip. The recovery comes despite heightened geopolitical tensions surrounding the Iran conflict and broader macro concerns, including potential oil supply disruptions and pressure in private credit markets.
Bitcoin’s performance is beginning to stand out compared with other major assets. Both the Nasdaq-100 and the S&P 500 have remained largely flat over the same period, while Gold — typically viewed as a safe haven during market turbulence — has posted only modest gains. So far this month, bitcoin is the only one among the three showing a clear rise.
The cryptocurrency also appears to be gradually decoupling from its previously tight correlation 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 fallen roughly 2.45%.
This divergence has led some analysts to cautiously suggest that the crypto market may be stabilizing after months of downward pressure.
Signs of seller exhaustion
One encouraging signal, according to Aurelie Barthere, is bitcoin’s muted reaction to recent geopolitical developments.
Earlier in the week, falling oil prices briefly lifted equities and cryptocurrencies as markets tentatively priced in the possibility of de-escalation in the Iran conflict. However, that optimism faded later in the session and risk assets gave back part of their gains.
Despite the reversal, bitcoin’s downside move remained relatively limited. Barthere pointed out that some traditional benchmarks, such as the Euro Stoxx 50, experienced sharper declines during the same period.
This resilience suggests that the marginal seller in the bitcoin market may be becoming less aggressive compared with equity markets.
Changing relationship with gold
Another trend catching traders’ attention is bitcoin’s shifting correlation with gold.
According to Bryan Tan from the crypto trading firm Wintermute, the correlation between bitcoin and gold has recently turned positive, moving to around +0.16 from -0.49 just a week earlier.
At the start of the Middle East conflict, bitcoin declined while gold rallied — a classic “risk-off” market response. More recently, however, both assets have been rising together while the U.S. dollar weakens.
If this trend continues, it could shift the narrative around bitcoin during geopolitical stress, suggesting investors may begin to treat it more like a macro hedge rather than purely a risk asset.
ETF inflows show improvement
Another factor supporting bitcoin’s recent strength may be improving flows into spot bitcoin ETFs.
ETF flows had been trending negative for months following the market peak in October. However, recent data indicates a noticeable shift.
According to Joe Edwards at Enigma, the past two weeks have shown improving flows, particularly into iShares Bitcoin Trust, the largest spot bitcoin ETF.
Those steady inflows suggest institutional demand may be stabilizing, giving analysts cautious optimism that the broader crypto market could be finding a firmer footing even as global macro uncertainty persists.
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