Bitcoin’s relationship with tech stocks has turned negative since the US-Iran war.

Bitcoin (BTC) broke its long-term relationship with tech stocks as the US-Iran war entered its third week.

Main Receptors:

Bitcoin is outperforming tech stocks amid the US-Iran war, signaling its interest as a geopolitical hedge.

BitMEX co-founder Arthur Hayes warned that BTC's renewed bullish strength could be a dead cat's ball.

BTC's relationship with the Nasdaq reverses negative

On a 52-week rolling basis, BTC's correlation with the tech-heavy Nasdaq Composite Index (IXIC) stood at -0.06, the lowest since December 2018. That marked a sharp reversal from multi-year trends where correlations were around 0.60–0.92.

Relations took a negative turn in late February, coinciding with US and Israeli attacks on Iran.

Since the start of the war on February 28, BTC/USD has risen more than 15%, while the Nasdaq has fallen about 2%.

This difference suggests that traders are increasingly using Bitcoin as a geopolitical hedge rather than a pure technology-linked risk asset.

Why Is Bitcoin Leaving Tech Stocks?

A key driver of Bitcoin's strength appears to be the aggressive BTC accumulation of the strategy.

In the last two weeks, Michael Saylor's company bought 40,331 BTC, part of the purchase was supported by the sale of STRC's preferred over the counter (ATM).

That purchase volume was about 9-10 times the amount of bitcoin mined at the same time, meaning that demand greatly outstripped new supply.

At the same time, US spot Bitcoin ETFs added another strong source of interest, bringing in more than $12.22 billion.

Another factor supporting the bulls' case is the increased liquidity of stablecoins associated with Middle East demand during the war. USDC's market capitalization rose to a record high of around $79.57 billion from $70 billion in early February.

The rise comes as demand for dollar-backed stolkcoins surges in centers such as Dubai amid the war between the US and Israel and Iran.

The rising supply of USDC suggests a greater amount of dollar liquidity going into the digital asset, increasing demand for Bitcoin just as the pace of strategic buying tightens the available supply.

According to Joe Consorti, head of growth at Bitcoin equity firm Horizon, bitcoin is undergoing a “geopolitical stress test,” with some macro models hinting that the price could reach $100,000 in the coming months.

Arthur Hayes warned of a “dead cat frenzy.”

Despite the recent divergence, not all analysts are convinced that bitcoin has been structurally removed from stocks.

In a March 5 post, BitMEX co-founder Arthur Hayes warned that Bitcoin's recent rally to around $70,000 could be a “dead cat,” warning that continued weakness in SaaS stocks amid strong financial conditions would drag BTC down.

Bitcoin remains more closely tied to US SaaS stocks than the broader Nasdaq index.

SaaS companies like Salesforce, Adobe, and Zoom are high-growth, liquid assets that, unlike the Nasdaq, have operated in the same macro conditions as crypto.

RELATED: Arthur Hayes says he's waiting to buy bitcoin until the Fed eases policy.

Hayes' caution is now reflected in market data.

The Coinbase Premium Index remains negative on a 30-day rolling basis, indicating weak US spot demand and suggesting that the recent rally lacks strong institutional tracking.

Furthermore, Bitcoin's recent rebound from the $76,000 resistance area, which is in line with the upper trend of the current bearish flag pattern, raises the chances of a decline to the lower trend line around $68,000.

A critical break below $68,000 has the risk of BTC price collapsing to its lower target of around $51,000.