Bitcoin has rebounded roughly 7% from its Sunday lows, showing notable resilience even as traditional markets struggle to gain momentum. Analysts say the cryptocurrency’s recent strength may reflect signs of seller exhaustion, shifting correlations with gold and improving inflows into spot bitcoin ETFs.
The world’s largest digital asset, Bitcoin, recently climbed to just under $71,000, recovering from its Sunday evening drop. The move comes despite rising geopolitical tensions tied to the Iran conflict and broader macro concerns, including potential disruptions to global oil supplies and strains in private credit markets.
Compared with other major assets, bitcoin’s performance has started to stand out. Both the Nasdaq-100 and the S&P 500 have remained largely flat during the same period, while Gold — traditionally viewed as a safe-haven asset during market stress — has only posted modest gains. So far in March, bitcoin is the only one among the three to record a clear advance.
The cryptocurrency is also beginning to diverge from its previous tight relationship with 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 shift has encouraged some analysts to believe the crypto market may be stabilizing after months of weakness.
Signs of seller fatigue
One positive signal, according to Aurelie Barthere, is bitcoin’s limited reaction to recent geopolitical headlines.
Earlier this week, markets briefly rallied as falling oil prices fueled hopes of a potential easing in tensions related to the Iran conflict. However, that optimism faded later in the session, and risk assets gave back some of their gains.
Despite the reversal, bitcoin’s downside reaction remained relatively mild. Barthere noted that some traditional benchmarks, including the Euro Stoxx 50, experienced sharper declines during the same period.
This suggests that sellers in the bitcoin market may be losing momentum compared with those in equities.
Bitcoin and gold moving together
Another development catching traders’ attention is bitcoin’s changing relationship with gold.
According to Bryan Tan at the crypto trading firm Wintermute, the correlation between bitcoin and gold has recently turned positive, rising 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 response. More recently, however, both assets have been moving higher at the same time as the U.S. dollar weakens.
If that trend continues, it could reshape the narrative around bitcoin during periods of geopolitical uncertainty, shifting the perception away from simply being a risk asset.
ETF flows improving
Another factor potentially supporting bitcoin’s strength is improving activity in spot bitcoin ETFs.
ETF flows had been trending negative for several months after 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 currently on the market.
Those renewed inflows are being interpreted as a potential sign that institutional demand for bitcoin may be stabilizing after months of outflows, giving analysts cautious optimism about the market’s near-term outlook.
