Bitcoin continues to climb despite war with Iran, oil price shock

Bitcoin continues to show resilience on Monday, crossing $74,000 and up 3% in the past 24 hours. So far, the asset is up 9.4% in March, CoinGlass data shows, despite the war in Iran, soaring oil prices, and inflation fears. Meanwhile, gold is down almost 3% in the past week.

In addition, Timothy Misir, head of research at Blockhead Research Network, noted that over the past five weeks, the S&P 500 has fallen roughly 2.2% while bitcoin has gained around 2.4%, “marking a rare period of decoupling between crypto and equities.”

“If the asset continues to trade independently from equities during macro stress, it would reinforce the narrative of bitcoin evolving into a geopolitical hedge asset,” he said, adding that for now, the market remains in consolidation mode.

So far, this has been the best month for bitcoin ETFs since October, recording $1.34 billion in inflows, according to SoSoValue. Also reflecting a shift in sentiment, CoinMarketCap’s Fear and Greed Index is now at 41 (“neutral”) following weeks stuck in “extreme fear” or “fear” territory.

In the short term, Greg Magadini, director of derivatives at Amberdata, said that at this point, the $75,000 level has become even more significant.

“Dealers are net short the $75k calls and will need to buy BTC as prices break through there. That’s going to make a rise in BTC prices accelerate. The resilience was very interesting,” Magadini said, adding that last week was the first week in a long time that bitcoin started decoupling from risk assets and outperformed as the markets dropped.

“I think this could be a turning point for higher BTC prices,” he said.

Bernstein analysts echoed the sentiment, saying that bitcoin and crypto markets have been resilient amid the Middle East conflict, outperforming gold and equity indexes. Bernstein analyst Gautam Chhugani reiterated that this was the “weakest bitcoin bear case in history.”

“Maybe it takes a physical conflict to realize Bitcoin remains the most portable (cross border), digital and liquid asset with no counter-party risks. Alternatively, our explanation is Bitcoin market structure has changed forever with Strategy acting as the ‘Bitcoin central bank of last resort’ and Bitcoin ETFs attracting more resilient (and less speculative) source of capital. We share some highlights of the emerging Bitcoin market structure,” Chhugani wrote in an note on Monday.

He said that Strategy’s treasury model and ETFs have transformed bitcoin’s ownership structure, and that “Bitcoin is building the most resilient capital base.”

Yet, not everyone is sold on the rebound theory, despite the resilience. Laurens Fraussen, research analyst at Kaiko, told Sherwood News he’s not convinced we’ve seen the macro bottom just yet.

“The fact that we’re pumping into FOMC (March 17-18) instead of derisking is exactly what has me concerned. Historically, this market derisks into Fed meetings when there’s actual conviction to the upside; this just feels like shorts reloading. We’ve seen BTC drop after seven of the last eight FOMC meetings, with the average decline around 3-5% within 48 hours of the announcement,” he said.

He said that while Strategy scooping up $1.57 billion in Bitcoin last week is ill-considered, institutional is “bullish medium-term,” and when you see those size clips going in, it often marks local resistance rather than the start of a leg up.

Adding to this the “messy” macro setup, he said that “we’re probably due for another leg down, especially post-FOMC.”

“The $70K level everyone’s watching as support is crowded, and if we lose that on a hawkish Fed tone, $63-65K comes back into play quickly,” he said.