Bitcoin (BTC) broke its longstanding correlation with tech stocks as the US–Iran war dragged into its third week.
Key takeaways:
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Bitcoin is outperforming tech stocks amid the US–Iran war, indicating its growing demand as a geopolitical hedge.
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BitMEX co-founder Arthur Hayes warns that BTC’s renewed upside strength may turn out to be a dead cat bounce.
BTC correlation with Nasdaq flips negative
On a 52-week rolling basis, BTC’s correlation with the tech-heavy Nasdaq Composite Index (IXIC) stood at -0.06, the lowest since December 2018. That marked a sharp reversal from multi-year trends where correlations were around 0.60–0.92.
The correlation flipped negative in late February, coinciding with the US and Israel’s attack on Iran.
Since Feb. 28, when the war began, BTC/USD has risen more than 15%, while the Nasdaq has slipped about 2%.
This divergence suggests traders are increasingly treating Bitcoin as a geopolitical hedge rather than a pure tech-correlated risk asset.
Why is Bitcoin decoupling from tech stocks?
A key driver of Bitcoin’s strength appears to be Strategy’s aggressive BTC accumulation.
Over the past two weeks, the Michael Saylor company bought 40,331 BTC, with part of the purchase funded by the 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.
At the same time, US spot Bitcoin ETFs drew more than $12.22 billion in inflows, adding another strong source of demand.
Another factor backing the bulls’ case is the rise in stablecoin liquidity tied to Middle East demand during the war. USDC’s market capitalization has climbed to a record near $79.57 billion, up from about $70 billion in early February.
The increase comes as demand for dollar-backed stablecoins has reportedly surged in hubs such as Dubai amid the US and Israel-Iran war.
Rising USDC supply points to stronger dollar liquidity entering digital assets, adding to Bitcoin demand just as Strategy’s buying spree is tightening available supply.
Joe Consorti, head of growth at Bitcoin equity company Horizon, said Bitcoin is passing its “geopolitical stress test,” with some macro models hinting that the price may reach $100,000 in the coming months.
Arthur Hayes warns of “dead cat bounce”
Despite the recent divergence, not all analysts are convinced that Bitcoin has structurally decoupled from equities.
In a March 5 post, BitMEX co-founder Arthur Hayes said Bitcoin’s recent rally toward the mid-$70,000 range could be a “dead cat bounce,” warning that continued weakness in SaaS stocks amid tighter financial conditions would likely drag BTC lower.
Bitcoin remains more closely tied to US SaaS stocks than to the broader Nasdaq index.
Unlike the Nasdaq, which includes defensive and diversified sectors, SaaS companies, such as Salesforce, Adobe, and Zoom, are high-growth, liquidity-sensitive assets that have largely moved in line with macro conditions similar to crypto.
Related: Arthur Hayes says he’s waiting to buy Bitcoin until Fed eases policy
Hayes’s caution now reflects in market data.
The Coinbase Premium Index has stayed negative on a 30-day rolling basis, pointing to weak US spot demand and suggesting that the recent rally lacks strong institutional follow-through.
Furthermore, Bitcoin’s recent pullback from the $76,000 resistance area, which also aligns with the upper trendline of its prevailing bear flag pattern, raises the odds of a decline toward the lower trendline at around $68,000.
A decisive breakdown below the $68,000 risks crashing the BTC price toward the measured downside target at around $51,000.
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