Bitcoin lost momentum after U.S. markets opened on Thursday, dropping nearly 2% over the past 24 hours to about $71,400 and drifting back toward the $71,000 level. The pullback came as broader U.S. equities weakened and geopolitical stress kept pressure on risk appetite.
Oil rose 5.3% to $78.70 a barrel as the Iran war showed little sign of ending quickly. The Dow Jones Industrial Average fell 1.4%, while the S&P 500 slipped 0.7%. The Nasdaq held up better with a 0.4% decline, helped by a sharp rebound in software shares. The iShares Expanded Tech-Software Sector ETF, or IGV, gained 2% on the day and was up about 9% over the previous five sessions.
Software strength breaks from bitcoin’s recent pattern
That split stood out because bitcoin and software stocks had been moving closely together. Since October, both had fallen in tandem as investors worried about AI disruption, and both had also bounced from recent lows over the last few days. Thursday’s session broke that pattern, with software names climbing while bitcoin retreated.
Arthur Hayes, CIO of Maelstrom, said bitcoin “isn’t in the clear yet”. He noted that even after the move to $74,000, the link with the IGV ETF remained in place. Whether the latest decoupling lasts is still unclear. Hayes added that the bounce “could be a dead cat bounce.”
Jobs data and rate expectations weigh on positioning
Some traders may also be trimming exposure ahead of Friday’s U.S. February jobs report. Recent economic releases have generally surprised to the upside, reducing expectations for a restart in Federal Reserve rate cuts. According to interest-rate traders at the Chicago Mercantile Exchange, the market now sees an 88% chance that the Fed will hold rates steady not only this month but also in April. A month ago, that figure stood at 59%.
Higher-for-longer rate expectations tend to pressure risk assets. Bitcoin’s retreat into a major macro data release fits that backdrop.
ETF inflows and spot demand still support the market
Bryan Tan, a trader at Wintermute, said the firm remains cautiously constructive, though geopolitical tail risk still calls for restraint. He pointed to improving flows into spot bitcoin ETFs, which have posted nearly $2 billion in inflows over the past week alone, along with stabilizing trading volumes, as factors supporting the market.
Tan also said that if the market continues to show a muted reaction to disruptions around the Strait of Hormuz, bitcoin may still have room to climb back toward the $74,000 to $75,000 range.
Analysts at Bitfinex said there has been a “notable increase in spot market strength,” suggesting the latest move higher was driven more by actual market buying than by speculative leverage. They added that if this trend continues, some relief in the coming weeks and months remains possible.