02.03.202612:52 Forex Analysis & Reviews: Bitcoin withstands heavy punch

Bitcoin, as the only major asset trading 24/7, took the brunt of the fallout from Middle East events. The US and Israel's strikes on Iran, followed by Tehran's ballistic-missile launches at neighbouring states, should have been a major shock for risk assets. Yet, the cryptocurrency passed the test, riding the roller coaster with honour.

Bitcoin dynamics

According to CoinGecko estimates, digital assets recovered roughly $32 billion by Sunday morning after losing $128 billion on Saturday on news of the armed conflict in the Middle East. Bitcoin then rallied further on reports of the killing of Iran's supreme leader — the logic being that if the adversary is decapitated, the risk of a prolonged confrontation falls sharply. There are market rumours that some Tehran officials are already signalling a willingness to negotiate with the US.

Still, even a rapid end to the regional confrontation is unlikely to be a catalyst for a sustained BTC/USD rally. Wintermute's research, using JP Morgan data, shows capital flows from crypto into US stocks over recent months, which accelerated after Bitcoin fell from record peaks in October.

This sheds light on the divergence between US stock indices and BTC/USD. For years, the digital asset was very sensitive to shifts in global risk appetite, but its decoupling from the S&P 500 and Nasdaq Composite has changed the dynamics. Unlike equities backed by issuer assets, Bitcoin relied largely on investor animal spirits — and when that faded, and volatility fell, interest in crypto waned.

The current consolidation and BTC/USD's resilience to a shock like the Middle East war can be seen as a ray of light in a dark landscape. In recent days, there were inflows of roughly $1 billion into Bitcoin-focused ETFs. This suggests the current trading range is more likely a distribution than pure short-covering — meaning the odds of an upside breakout are rising.

Capital flows into Bitcoin ETFs

What event could become the next bullish driver to revive BTC/USD? JP Morgan argues it could be Congress passing a clarity bill that would formalise the development and expansion of digital?asset market infrastructure. That would boost tokenisation and attract new institutional investors. The event is expected in H2 2026.

Technically, the daily chart for BTC/USD recorded two false breakdowns below the lower border of the $65,000–7$0,000 consolidation range, forming a 1?2?3 reversal pattern. This invites consideration of buying breakouts above the resistance at $67,500 and $70,000.