Bitcoin's (BTC) 52-week rolling correlation with the Nasdaq Composite turned negative in late February - reaching its lowest level since December 2018, according to data cited by CoinTelegraph - as the cryptocurrency gained more than 15% since the start of the U.S.-Iran war on Feb. 28, while the Nasdaq slipped approximately 2% over the same period.
The divergence has revived debate over whether Bitcoin is behaving as a geopolitical hedge or staging a temporary rally in risk-off conditions.
The correlation shift coincides with a cluster of demand-side factors. U.S. spot Bitcoin ETFs drew more than $12.22 billion in inflows during the period, while Strategy added 40,331 BTC over two weeks - approximately 9-10 times the Bitcoin mined during the same window - purchasing the latest tranche primarily through STRC preferred share issuance.
Stablecoin Demand as a Demand Signal
USDC's market capitalization climbed to a record approximately $79.57 billion, up from around $70 billion in early February, in part driven by demand for dollar-backed stablecoins in Gulf hubs including Dubai, amid the Middle East conflict.
Rising stablecoin supply has historically preceded increased spot cryptocurrency buying as dollar liquidity enters the ecosystem.
Bitcoin was trading near $71,200 at the time of writing, having pulled back from resistance near $76,000 earlier in the week.
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The Counterargument
BitMEX co-founder Arthur Hayes cautioned in a March 5 post that Bitcoin's move toward the mid-$70,000s could be a "dead cat bounce."
Hayes argued that SaaS companies - high-growth, liquidity-sensitive equities such as Salesforce, Adobe, and Zoom- have been tracking crypto conditions closely, and continued weakness there under tight financial conditions would likely drag Bitcoin lower.
The Coinbase Premium Index has remained negative on a 30-day rolling basis, suggesting limited follow-through from U.S. spot buyers despite headline ETF inflows.
From a technical standpoint, Bitcoin's rejection at $76,000 aligns with the upper trendline of what some analysts describe as a bear flag.
A breakdown below $68,000 would open a measured downside target near $51,000, though that level remains speculative pending confirmation of the pattern.
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