Bitcoin (BTC) climbed above $73,000 on Friday, solidifying support above the $70,000 mark for the week. These gains occurred as the US reported weaker economic activity data, raising concerns about a potential recession, while geopolitical tensions between Iran and Israel continue to escalate.
While macroeconomic events and institutional inflows may be driving Bitcoin’s bullish momentum, traders remain cautious about whether the five-month correction has truly ended.
Economic Turmoil and Investor Appetite Boost Bitcoin
The US economy expanded at a mere 0.7% annual rate in the fourth quarter of 2025, a significant downward revision from earlier estimates, according to a US Commerce Department report. This data increases the risks of a recession throughout 2026, prompting some investors to move away from traditional assets like US Treasuries.
Yields on the US 10-year Treasury note rose to 4.26%, indicating investors are demanding higher returns to hold these assets. The potential for reduced liquidity elsewhere drives traders to seek safety in scarce assets. This dynamic partially explains why the S&P 500 traded only 5% below its all-time high despite worsening economic conditions.
On Monday, S&P 500 futures fell to their lowest levels in over three months after oil prices briefly surged to $119.50 per barrel. The US decision to temporarily authorize the purchase of Russian oil stranded at sea helped to ease some short-term market concerns, as announced by US Treasury Secretary Scott Bessent on Friday.
Institutional demand for Bitcoin is also seen as a potential driver for its recent bullish momentum. Spot Bitcoin exchange-traded funds (ETFs) experienced four consecutive days of net inflows totaling $583 million. Analysts also estimate that MicroStrategy (MSTR) accumulated over $900 million through the yield-bearing STRC instrument.
Bitcoin Momentum Strong, But Bear Market Concerns Linger
The current economic backdrop suggests potential liquidity injections and growing institutional interest in Bitcoin. However, this does not definitively signal the end of the five-month correction that followed the $126,000 peak in October 2025.
Bitcoin’s 50-day correlation with the Nasdaq 100 stands at 84%. As concerns persist over sticky inflation and stagnant economic growth, the likelihood of a stock market pullback increases. Traders may be hesitant to use Bitcoin as a hedge, particularly given its recent underperformance compared to gold.
Furthermore, oil prices remain approximately $30 higher than levels seen before the conflict in Iran began. These elevated fuel costs can negatively impact consumer spending and contribute to inflationary pressures, potentially reducing the capital available for retail traders to invest in cryptocurrencies.
Inflows to spot BTC ETFs surged, with $2.14 billion entering the funds from February 24 to March 4, contributing to a 14% rally. However, prices subsequently fell 10% over the next four days as these flows reversed. This suggests that spot ETF activity may be reacting to Bitcoin’s price movements rather than leading them.
Whether Bitcoin remains above $70,000 over the weekend could be a key indicator for investor sentiment. While a five-week consolidation period and multiple tests of the $64,000 support level demonstrate bull confidence, the recent price action has not yet provided a clear signal for a sustained breakout.
This content is for informational purposes only and does not constitute financial advice.
Fonte: Cointelegraph
