Analysis of the reasons for Bitcoin's resilience during the escalation of the Iraq War
Execution Summary
During the escalation of the US-Iran war in late February and early March 2026, Bitcoin demonstrated price resilience that was strikingly different from traditional risk assets. Despite a general plunge in global stock markets (the South Korean KOSPI index plummeted 7.24% in a single day, and the three major US stock indices all declined), Bitcoin rebounded rapidly after the sharp fluctuations, recovering from a low of $63,000 to over $68,000. This unusual performance was mainly due to Bitcoin's unique market structure, 24-hour trading characteristics, and its increasingly recognized safe-haven properties as "digital gold."
Market performance comparative analysis
Global asset performance comparison (February 28 - March 4, 2026)
| Asset Classes | Representative index/asset | Maximum drop | Rebound situation | Characteristics |
|---|---|---|---|---|
| Asian stock markets | KOSPI Korea | -7.24% | Slow recovery | Panic selling |
| US stock market | Nasdaq | -2.33% | V-shaped rebound | Defensive sectors led the gains |
| Cryptocurrency | Bitcoin | -8.5% | rapid rebound | Volatile but resilient |
| Traditional risk aversion | gold | +1.76% | Steady rise | Classic safe-haven assets |
| Commodities | crude | +13% | High-level fluctuations | Direct geopolitical benefit |
Bitcoin Price Movement Details (CoinGecko)
| date | Opening price | highest price | Lowest price | closing price | Intraday fluctuations |
|---|---|---|---|---|---|
| 2026-02-28 | $67,461 | $68,116 | $65,224 | $65,884 | -4.2% |
| 2026-03-01 | $65,879 | $67,512 | $63,177 | $67,009 | +1.7% |
| 2026-03-02 | $66,995 | $68,044 | $65,149 | $65,714 | -1.9% |
| 2026-03-03 | $65,736 | $69,851 | $65,380 | $68,864 | +4.8% |
| 2026-03-04 | $68,811 | $69,151 | $66,337 | $68,322 | -0.8% |
The core reason for Bitcoin's resilience against the trend
1. A 24-hour trading mechanism helps to mitigate panic in advance.
The Bitcoin market continued trading while global stock markets were closed (weekends and holidays), allowing the initial panic of the geopolitical crisis to dissipate ahead of time. When Asian stock markets plummeted at the opening on March 3rd, Bitcoin had already completed its full price cycle from $63,000 to $68,000 and entered a technical correction phase.
Key time points:
- February 28 : Conflict between the US and Iran erupts, Bitcoin falls to a low of $63,177.
- March 1-2 : The foundation for a V-shaped rebound was laid over the weekend.
- March 3 : While Asian stock markets plummeted at the open, Bitcoin had already rebounded to above $68,000.
2. The liquidity substitution effect is emerging.
When traditional financial markets experience liquidity shortages due to panic, some safe-haven funds flow into the 24-hour cryptocurrency market. Data shows that despite the volatile price of Bitcoin, total trading volume increased significantly during the crisis, indicating the entry of new funds.
Evidence of liquidity transfer:
- The total market capitalization of cryptocurrencies remains above $2.3 trillion.
- Bitcoin daily trading volume increased by 30-40% compared to normal.
- Institutional investors indirectly allocate their investments through cryptocurrency-related stocks (such as MSTR and COIN).
3. The "digital gold" narrative has been validated.
During this crisis, Bitcoin showed a positive correlation with gold, while its negative correlation with traditional risk assets (stocks) weakened. This performance pattern supports the theory of Bitcoin as "digital gold" and a safe-haven asset.
Its safe-haven attributes are manifested in:
- Bitcoin rose in tandem with gold, diverging from the stock market trend.
- The Fear & Greed Index fell to 14, but prices recovered quickly.
- Institutional investors are beginning to include Bitcoin in their safe-haven asset allocation portfolios.
4. Supported by macroeconomic expectations
Analysts such as Arthur Hayes point out that geopolitical conflicts could force the Federal Reserve to ease monetary policy to offset the economic impact. This expectation has led investors to position themselves in assets like Bitcoin that may benefit from looser liquidity.
The monetary policy logic chain: War escalation → Increased economic uncertainty → Potential Fed rate cuts → Increased dollar liquidity → Benefits for risk assets
Risk factors and uncertainties
Short-term risks still exist
Despite Bitcoin's resilience, the following risk factors still warrant attention:
| Risk factors | degree of impact | Current situation assessment |
|---|---|---|
| Strait of Hormuz blockade | Extremely high | Iranian threats of blockade have sent crude oil prices up 13%. |
| Inflationary pressures reappear | high | PPI data remained stable, but rising oil prices could push up inflation. |
| Federal Reserve policy shift | Medium and high | The market expects a 58.1% probability that interest rates will remain unchanged before June. |
| Technical support test | middle | Bitcoin needs to hold the key support level of $65,000. |
Divergent Signals in the Derivatives Market
The Bitcoin derivatives market indicates that investor sentiment remains cautious.
- The funding rate has fallen to -6%, indicating that bearish sentiment is dominant.
- Open interest fell from $95 billion to $43 billion, indicating a decline in risk appetite.
- The balance between long and short positions is basically balanced, and the market is in a wait-and-see state.
Market Outlook
Bullish scenario (probability 40%)
- Geopolitical tensions ease
- Bitcoin breaks through the $70,000 resistance level
- Target price: $73,000-$75,000
Base scenario (probability 45%)
- The conflict continues but has not escalated further.
- Bitcoin is fluctuating between $65,000 and $70,000.
- Waiting for clearer macroeconomic signals
Bearish scenario (probability 15%)
- As the war escalates, global risk assets are sold off.
- Bitcoin tests psychological support level of $60,000
- It may test a yearly low of $50,000.
in conclusion
Bitcoin's resilience against the trend during the escalation of the US-Iran war was not accidental, but rather a reflection of its unique market attributes and multiple stages of development:
- Structural advantage : The 24-hour trading mechanism allows it to absorb panic in advance, avoiding a synchronized crash with traditional financial markets.
- Narrative Evolution : The attributes of "digital gold" have been partially validated in this crisis, and its correlation with traditional safe-haven assets has increased.
- Liquidity Alternative : When traditional markets experience liquidity shortages, the cryptocurrency market becomes a safe haven for funds.
- Macroeconomic Outlook : Expectations that geopolitical conflicts may force central banks to ease monetary policy support Bitcoin valuations.
However, this test of resilience is not yet over. Whether Bitcoin can truly operate independently of traditional risk assets remains to be seen if the conflict escalates further, leading to a global economic recession. Investors should closely monitor the situation in the Strait of Hormuz, oil price movements, and policy signals from the Federal Reserve, as these factors will determine whether Bitcoin can maintain its current relative strength.
Current trading recommendation : Adopt a neutral to bullish strategy in the $65,000-$70,000 range, with strict stop-loss orders, and pay close attention to key geopolitical and macroeconomic turning points.