Cryptocurrencies extended gains on Tuesday as easing concerns over a potential oil supply shock improved risk sentiment in global markets.
This change in sentiment came after the International Energy Agency (IEA) announced it would convene an extraordinary meeting of its member countries to consider releasing emergency oil reserves.
Bitcoin surged above $71,500 for the first time since Thursday, before returning to the current level of $71,300, up 3.2% in the last 24 hours. The broad market CoinDesk 20 Index rose by a similar amount, with XRP (XRP), , and Hyperliquid’s native token (HYPE) is leading gains among major crypto assets.
WTI crude oil extended its decline following the news, falling to $82 after climbing to nearly $120 over the weekend. Meanwhile, the tech-heavy S&P 500 and Nasdaq 100 were up about 0.5% as of midday.
Most crypto-related stocks reflected this progression. Stablecoin issuer Circle (CRCL) rose another 6%, now almost 100% higher in two weeks, while digital asset infrastructure company BitGo (BTGO) climbed more than 8% and blockchain company Figure (FIGR) rose 12%.
From Nigel Farage was announced on Monday as joining UK-based treasury firm Bitcoin Stack BTC (STAK), this stock surged more than 200%.
Bitcoin decoupling from software
Bitcoin appears to be losing its correlation with the Software ETF (IGV) as BlackRock’s IBIT is up around 3% in the past 24 hours while IGV is down over 2%.
However, over the past five days, IGV is up about 1.5% while IBIT is down about 2%, suggesting that IBIT may still have some catching up to do if the correlation with software stocks is to recover.
A weakening of correlation could also be notable, as it could indicate that bitcoin is starting to trade more independently of software and technology stocks, potentially becoming a less correlated asset during periods of macro uncertainty. While still outperforming gold and US stocks since the start of the war.
“Cautiously optimistic” for BTC
Zooming out, Bitcoin’s recent price action has been relatively resilient despite ongoing macroeconomic turmoil, said James Harris, CEO of crypto yield platform Tesseract Group.
After briefly testing the $60,000 zone, BTC rallied even as broader risk markets grappled with geopolitical uncertainty, he said. At the same time, ETF inflows remained broadly favorable, while strong deleveraging at the start of the month helped eliminate excessive positioning in derivatives markets.
The mix of washed out sentiment, devastated leverage and support around the $66,000 area suggests that Bitcoin could be entering a bottoming process, Harris said. However, downside risk persists as the crypto market remains fragile.
“If support in the $60,000 area fails, we could easily see another test lower, but for now we remain cautiously bullish on BTC,” he said.
