Bitcoin Correlation With Tech Stocks Flipped Negative Since the US–Iran War

BitcoinBTC) broke its longstanding correlation with tech stocks as the US–Iran war dragged into its third week.

The key takeaways:

• Bitcoin is outperforming tech stocks amid the US–Iran war, indicating its growing demand as a geopolitical hedge.

• BitMEX’s co-founder Arthur Hayes says that BTC’s newfound strength could be nothing more than a deadcat bounce.

BTC correlation to Nasdaq turns negative

BTC’s 52-week rolling correlation to the heavily tech-oriented Nasdaq Composite Index IXIC was -0.06, its lowest level since December 2018. That marked a sharp reversal from multi-year trends where correlations were around 0.60–0.92.

In late February, the correlation became negative and coincided with Israel’s and US’ attack on Iran.

BTC/USD rose more than 15% since February 28, the day the war began. The Nasdaq fell about 2%.

The divergence between the two shows that traders increasingly treat Bitcoin as a geopolitical risk hedge, rather than just a tech-correlated asset.

Bitcoin and tech stocks: Why are they decoupling?

The key factor driving Bitcoin’s growth appears to be Strategy’s aggressive BTC accumulation.

Michael Saylor Company purchased 40 331 BTC in the last 2 weeks. at-the-market (ATM) sales of its STRC preferred stock.

That buying spree amounted to roughly 9–10 times the Bitcoin mined during the same period, meaning demand significantly outpaced new supply.

US Bitcoin spot ETFs also saw inflows of more than $12.22 billion. This is another source for strong demand.

A second factor supporting the bulls is the increase in stablecoin liquidity due to Middle East demands during the conflict. USDC’s capitalization is now at a high of nearly $79.57 billion. This was up from around $70 billion early in February.

Demand for stablecoins backed by dollars has increased. reportedly surged in hubs such as Dubai The US-Israeli war and the Iran-US conflict is a major concern.

As Strategy continues to buy Bitcoins, the supply of USDC is decreasing. This indicates increased dollar liquidity in digital assets.

Joe Consorti said that Bitcoin has passed its “geopolitical stress test“, with macro models hinting at the price may reach $100,000 in the coming months.

Arthur Hayes warns about “dead cat bounce”

Even though the Bitcoin price has diverged recently, some analysts still do not believe it is structurally uncoupled from equity.

Arthur Hayes – cofounder of BitMEX – wrote about his views in a blog post on 5 March. said Bitcoin’s recent surge towards the mid-$70,000 area could be an indication that Bitcoin is about to enter a new phase of growth. “dead cat bounce,” BTC is likely to fall due to the continued decline in SaaS stock prices amid tighter financial circumstances.

Bitcoin remains more closely tied to US SaaS stocks The Nasdaq Composite Index is more than the Nasdaq broader index.

SaaS assets, like Adobe, Zoom and Salesforce, have been volatile and high growth, but they are also liquid and sensitive to macroeconomic conditions.

Related: Arthur Hayes says he’s waiting to buy Bitcoin until Fed eases policy

Hayes’s caution is now reflected in the market data.

Coinbase Premium Index – The Coinbase Premium Index was launched on stayed Negative on a rolling 30-day basis. This reflects a low US spot demand, and suggests that there has been little institutional backing for the recent rally.

Bitcoin has experienced a recent surge in popularity. pullback from the $76,000 Resistance area which aligns also with upper trendline in its predominant bear flag pattern raises odds for a fall towards lower trendline around $68,000.

If the BTC rate falls to below $68,000, it could cause the price of BTC to crash towards the measured downside target at around $51,000.