Bitcoin holds 66k as oil’s jump amid US-Iran war clouds the outlook

Bitcoin fell 1.5% last week, its second straight weekly decline, and after a brief breakdown, continues to trade within the familiar 65 to 71k range it has traded in since the start of February. The largest cryptocurrency saw modest volatility over the weekend, falling to 63k before rebounding to 68k amid rising tensions in the Middle East. BTC trades at 66k heading into the new week, showing resilience even as the equity markets tumble.

The selloff in Bitcoin last week was not mirrored across the crypto market, with some altcoins outperforming BTC while others underperformed. Ethereum, for example, outperformed, rising 1%, while BNB also outperformed, gaining 1.3%. On the other hand, TRX, DOGE, and BCH underperformed, with the latter dropping 23% across the past 7 days.

The total crypto market capitalisation has fallen 2.1% over the past 24 hours, dropping to $2.25 trillion at the time of writing. This is down slightly from the $2.3 trillion market capitalisation seen a week ago, but down significantly from the $2.67 trillion recorded a month ago.

However, sentiment analysis paints an improving picture, albeit slowly. The Fear and Greed Index has risen to 14, still in Extreme Fear territory but up from 9 this time last week.

Is BTC institutional demand turning a corner?

Bitcoin ETF flows returned last week. There were three straight days of net inflows totalling $1 billion. Across the week, BTC ETFs recorded $737.3 million in net inflows, the first week of inflows since mid-January.

However, this was not sufficient to turn February, which saw $$206.5 million in net outflows, into the fourth consecutive monthly decline. Institutional demand will need to pick up further for BTC price to book gains.

Macro backdrop

Cryptocurrencies are showing resilience while other risk assets come under pressure after the US and Israel attacked Iran over the weekend and Iran retaliated, shaking investor confidence while fuelling demand for safe havens.

Bitcoin, the only major market open at the weekend, traded erratically after the strikes began on Saturday. Prices fell to 63k then firmed on reports that Iran’s supreme leader, Ayatollah Ali Khamenei, had been killed.

The risk-off mood is being seen across the broader market, with US futures pointing to a weaker open, whilst Gold has jumped higher. So far, BTC and crypto are holding up surprisingly well. However, this may change if the war goes on for a long period of time.

Oil, Bitcoin, and liquidity

Hostilities in the Middle East could upend the energy market and send shock waves through the global economy. All markets are reacting to these developments, but the main focus is on the oil markets, which trade 7% higher on Monday on supply fears as Iran blocked the Strait of Hormuz, a key chokepoint for oil.

The prolonged shutdown of the Strait could see oil prices remain high for longer, potentially rising towards $100 per barrel. This has implications well beyond the energy markets, with knock-on effects for monetary policy, liquidity, and Bitcoin.

Higher crude oil prices could reignite inflationary pressures, driving up global CPI. If inflation expectations rise, central banks, including the Federal Reserve, could be forced to delay rate cuts or even start hiking rates again. This repricing could lift treasury yields, igniting crypto risk.

Rising yields tighten global liquidity. High yields draw capital away from speculative and risk assets, which typically drags on Bitcoin, which often acts as a high-beta asset.

In other words, it’s not the escalating geopolitical tensions or the risk-off that could hurt BTC. Instead, a persistent jump in oil prices points to higher inflation, no rate cuts, higher treasury yields, and tighter liquidity, which bodes poorly for BTC.

However, there is another side to this argument: while risk aversion and liquidity worries are negative for Bitcoin, the cryptocurrency, like Gold, can benefit from inflation concerns. This could explain the curious moves that we saw in BTC over the weekend, with BTC falling to a low of 63k before recovering to 68k on Sunday.

Furthermore, could BTC showing resilience amid falling global equities be a sign that it could decouple from risk assets?

What could March bring for BTC?

Investors are still cautious as we head into March, after BTC fell 15% in February, in a pattern similar to last year, when Bitcoin dropped by over 17%.

With Bitcoin now recording five straight monthly declines since October 2025 and with a medium March return of -2%, the seasonal backdrop brings little comfort. That said, there could be signs of a quiet shift forming.

1) Bitcoin trades as a risk asset

One of the biggest concerns for Bitcoin right now is its continued correlation with US equities. This can be seen in Bitcoin’s dismal February and the weak showing of US equities, with the S&P 500 also posting losses across the month.

Furthermore, the 30-day rolling correlation between Bitcoin and S&P 500 is at 0.55, up from 0.50 in October 2025. This means the Bitcoin price largely tracks stocks, which undermines its appeal as a hedge against traditional market risk.

Looking at the correlation with software stocks, it is even higher for Bitcoin, and the software sector is moving almost in parallel.

Trump continues to increase economic uncertainty, hurting risk assets, and the software sector has been hit hard by AI disruption fears, which could bode poorly for Bitcoin, as investors prefer gold and silver as a safe-haven trade.

However, should the Gold and Silver trade become oversaturated, capital could rotate into Bitcoin, although this rotation hinges on the equity correlation breaking.

2) ETF outflows fade

As noted above, ETF outflows are fading, and although February marked the fourth straight month of net outflows, this is sharply down from those seen in November, suggesting the trend is shifting. November saw $3.48 million in net outflows, while February saw $206 million. This marks a 94% decline in net outflows.

3) Selling pressure shows signs of exhaustion

Looking beyond ETFs’ on-chain data points to selling from both long-term holders and Bitcoin miners is slowing down.

Long-term holders (those who have held BTC for over 365 days) are considered critical for gauging market direction. When they stop selling, the Bitcoin price often stabilises and recovers. Throughout February, net selling from this cohort collapsed. On 5 February, the 30-day rolling net position for long-term holders was -243,737 BTC, and by 1 March, that figure had increased to just -31,976, marking an 87% reduction.

A similar trend was seen within Bitcoin miners who sell BTC to cover operational costs. They saw a peak capitulation on February 8th when net selling reached -4718 BTC, and by 1 March, this was down to just -837 BTC, a sharp decline that suggests the worst of miner capitulation may have passed.

4) Whales are accumulating, but the technical picture is cautious

While selling pressure is easing, buying is quietly picking up among whales. Wallets holding between 100k and 1 million BTC increased their holdings from 676,540 to 690,000 BTC around 19-20 February, amid a 4% price rebound, and have not sold since.

Meanwhile, smaller whales with between 1k and 10k BTC also began accumulating from February 25, with holdings rising from 4.222 million to 4.23 million BTC.

However, the technical picture reply requires more conviction. Bitcoin remains firmly below its 50-day SMA at 77.2k; a rise above here on the 80k round number could bring back more buyers. The 200 SMA is still considerably higher at 96.8k.

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