Key takeaway:
Bitcoin (BTC) is generally not regarded as a reliable investment during periods of geopolitical uncertainty, particularly when oil prices spike in response to escalating global tensions. However, historical data suggests that such moments often present compelling buying opportunities for traders prepared to capitalize on market dislocations.
Oil spikes often align with sharp, temporary Bitcoin price corrections
In the face of imminent conflict or instability, investors typically rotate into short-term government debt and cash, favoring safety over volatility. Nevertheless, Bitcoin has historically outperformed in the week following abrupt oil price surges, such as the recent rally to $77 per barrel on Friday.
WTI oil futures/USD (blue, left) vs. Bitcoin/USD (right), 15-min. Source: TradingView / Cointelegraph
A review of the 15-minute price chart reveals an inverse relationship between Bitcoin and oil. As WTI crude rose 19% between Wednesday and Friday, Bitcoin declined from $110,200 to $102,800. This pattern aligns with the prevailing view of Bitcoin as a risk-on asset, not a defensive hedge. Yet, a broader time frame offers different insights.
10-day correlation: WTI oil futures vs. Bitcoin. Source: TradingView / Cointelegraph
Over the long term, data shows no consistent correlation between Bitcoin and oil prices, with the relationship fluctuating considerably. Still, episodes of extreme oil price appreciation have coincided with sharp Bitcoin corrections—three times in the past year alone. Each instance was followed by a rebound in Bitcoin’s price, with gains ranging from 16% to 24% within eight days of the initial drop.
WTI oil futures/USD (blue, left) vs. Bitcoin/USD (right), 12 hours. Source: TradingView / Cointelegraph
In the most recent instance, on Jan. 15, 2025, oil surged to $80.50 from $72.50 just six days earlier. The spike coincided with a Bitcoin drop to $89,300 on Jan. 13, followed by a 22% rally to $109,300 by Jan. 20. The move came after the United States imposed sanctions on Russia’s oil sector, while US crude inventories declined for eight consecutive weeks.
Earlier, on Oct. 8,…
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