Bitcoin has demonstrated strong performance recently and is on track to achieve its best weekly performance since September 2025. This robust independent trend is evident against a backdrop of overall cautious market sentiment, driven by its gradually weakening correlation with technology stocks and the return of institutional capital. Recently, Bitcoin has accumulated a gain of approximately 8.5%, with its trading price breaking through $71,000. Its performance is particularly outstanding compared to other major assets. Since the escalation of the Middle East conflict, Bitcoin has surged over 13%, significantly outperforming traditional assets like technology stocks, gold, and US equities.
Since March this year, US spot Bitcoin ETFs have recorded net inflows of approximately $1.3 billion. This data suggests that March could become the first month with positive fund inflows since October 2025, further indicating a renewed focus from institutional investors on Bitcoin.
Over the past week, a divergence between Bitcoin and the broader market has begun to emerge, with Bitcoin gradually decoupling from its strong correlation with tech stocks, a change that is particularly noticeable in the short term. This divergence stems from Bitcoin beginning to decouple from its traditional peer assets, especially after the outbreak of the Middle East conflict, where its price action has shown greater independence. Using BlackRock's iShares Bitcoin Trust (IBIT) as a short-term proxy, the trust has risen about 3.5% and is nearing a one-month high. In stark contrast, the iShares Expanded Tech-Software ETF (IGV), gold, and US stocks have all been trending downward. Since the Middle East conflict erupted over two weeks ago, Bitcoin's advantage has become more pronounced, with a cumulative gain of around 13%. This not only outpaces IGV (up about 3% over the same period) but also far exceeds the performance of gold (down about 6% over the same period) and US stocks, making it one of the standout assets in the current market.
On a monthly basis, Bitcoin has already achieved a gain of approximately 7%. If this trend continues, it will break a five-month losing streak and mark the first monthly increase since September 2025. Previously, Bitcoin experienced a significant correction over the past five months, falling up to 50% from its historical high last October. The recent rebound is closely tied to the sustained return of institutional capital from the United States. The primary buyers of Bitcoin are currently concentrated in the US market, where institutional demand is gradually recovering. This is one of the core drivers supporting Bitcoin's recent rebound, a trend further corroborated by the inflow data into US spot Bitcoin ETFs.
However, it is important to note that despite Bitcoin's recent strong performance and its weakened correlation with tech stocks, this does not mean it is entirely immune to market risks. Overall market sentiment remains extremely cautious. The Crypto Fear & Greed Index continues to reside in the "Extreme Fear" zone, while perpetual futures funding rates remain negative. The perpetual futures funding rate is a periodic payment made between traders to keep the contract price aligned with the spot market. A negative rate indicates that short positions are paying long positions, suggesting that short positions dominate the current market, and traders are willing to pay to maintain their short exposure. This also signals that short-term market correction risks persist.
The recent price action does not signify that Bitcoin has completely detached from risk, but it does sufficiently indicate that investors are no longer viewing it purely as a risk asset. Its asset attributes are undergoing a subtle transformation. As relevant analysis suggests, Bitcoin has the potential to become an all-weather leading indicator, capable of reflecting the overall market's reaction to macro events in advance. When the Middle East conflict erupted, Bitcoin's price moved ahead of all other asset classes. Now, as other assets begin to follow Bitcoin's lead, its market influence is further highlighted. Regarding future trends, while short-term volatility risks remain, the return of institutional capital and the reduced correlation with tech stocks provide some support for Bitcoin. Key factors to monitor going forward include developments in the Middle East conflict and the direction of institutional fund flows, as these two variables will be crucial in influencing Bitcoin's trajectory.
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