Now that $BTC (-2,06 %) and altcoins have been bullish about the conflict in the Middle East and are now showing a breakout from the downtrend, one should zoom out and visualize the structure of the trend.

LILA - The price is still in a falling trend channel

YELLOW - Continuation pattern (bearish wedge)

WHITE - The most recent price movement suggests a fake-out like in mid-January

GREEN - The first bottom was formed at $60K

RED - A crucial area that could provide support and will be reached before the end of the downtrend

Projection

A V-shaped recovery, which is currently being hinted at, is extremely rare to see at the end of a bear market.

It is likely that the $60K mark will be broken and the bottom will be found in the $50K area - this would correspond to a classic 5-stage downtrend.

However, if another continuation pattern becomes visible in this area, it would go to the $38K area...

What is your strategy? Buy the dip, blunt savings plan or wait for a bottom?

In the face of escalating tensions in the Middle East, the price of oil rose by 10% and $GOLD gained 3.5%, confirming its traditional role as a safe haven - but Bitcoin is defying expectations, remaining stable and even attracting inflows. Investors appear to be using the correction as both an entry point and a hedge, pointing to a potentially growing role for cryptocurrencies in times of geopolitical uncertainty and volatile markets.

Geopolitics drives oil and gold higher

Geopolitics once again dominated the markets over the weekend after President #trump used Saturday to further escalate tensions. The withdrawal of British embassy staff from Iran had already indicated rising risks, so markets were not completely unprepared. The crucial question is not only whether the #iran can be contained, but also how quickly potential disruptions could spread. Iran controls the Strait of Hormuz, one of the world's most important energy routes. Withdrawals by insurers and visible congestion of tankers indicate that the situation is already operationally relevant and not just rhetorical. Drone activity and signals of support from Hezbollah and the Houthi militia increase the likelihood that the conflict will escalate. The 10% rise in the oil price reflects this fragility, while gold is fulfilling its traditional role as a safe haven with a gain of 3.5%.

Bitcoin defies uncertainty - inflows return

Even more remarkable is the reaction of Bitcoin. Historically, Bitcoin, as the only liquid asset that is also traded at the weekend, has usually reacted negatively in phases of forced risk reduction. This time, however, the cryptocurrency remained stable and even rose despite increasing uncertainty. The lack of significant liquidations despite rising yields and geopolitical tensions suggests that positioning is more balanced compared to previous episodes. Over the past five months, major market participants have turned over around USD 30 billion and technical and fundamental lows have already been reached. Last week, inflows returned: USD 1 billion flowed in after USD 4 billion had previously flowed out over five weeks, and a further USD 500 million was added on Monday alone. This suggests that investors see the correction as both an entry opportunity and a hedge in the current geopolitical situation.

The chart shows the intraday price development of $BTC (-2,06 %) from the start of the conflict at 6:15 GMT on February 28 to the current time, as well as the relative price performance of the Stoxx 600, illustrating the significant outperformance of Bitcoin since the outbreak of the conflict. The flat sections in the equity index reflect periods when exchanges were closed, highlighting the liquidity constraints of equities compared to continuously tradable Bitcoin.

Macroeconomics tighten financial conditions

The macroeconomic environment is making the situation even more difficult. The Producer Price Index rose by 0.5% month-on-month, above the expected 0.3%, while the core rate reached 0.8%, mainly driven by trade-related services. With energy prices now rising sharply, rate cut expectations are likely to be postponed further, tightening financial conditions compared to a few weeks ago. If energy-driven inflation delays monetary easing, traditional risk assets could come under pressure. However, if geopolitical tensions intensify and confidence in global financial and trade structures - particularly along critical routes such as the Strait of Hormuz - erodes further, scarce and non-government assets such as Bitcoin could benefit in the medium term.

Via the CoinShares Bitcoin ETP $BITC (-1,91 %) you can also invest in Bitcoin.

Investment products on digital assets recorded inflows of USD 1 billion last week, ending a five-week period of outflows that totaled USD 4 billion. From a macroeconomic perspective, it is difficult to attribute the change in sentiment to a single trigger. However, the previously weak price performance, the break of important technical support levels and renewed accumulation by large $BTC (-2,06 %)-holders are likely to have contributed to the trend reversal. Anecdotally, it can also be observed that recent client discussions are almost exclusively about attractive entry levels and no longer about reducing the allocation to this asset class.

Bitcoin was the main beneficiary, attracting USD 881 million. At the same time, inflows into short Bitcoin products amounting to USD 3.7 million illustrate that opinions continue to diverge. Ethereum also saw inflows totaling USD 117 million - the highest since mid-January. Both $ETH (-2,22 %) and #bitcoin are still net negative since the beginning of the year.

$SOL (-2,32 %) In contrast, inflows of USD 53.8 million were recorded last week and total USD 156 million since the start of the year. At $LINK (-1,38 %) (Chainlink) saw inflows of a moderate USD 3.4 million, while there were no significant outflows.

You can invest in Bitcoin, Ethereum, Solana and Chainlink via the following vehicles:

$BITC (-1,91 %)
$CETH (-2,51 %)
$SLNC (-2,76 %)
$CCHA (-1,5 %)