What to know:
- Bitcoin’s rally is taking a breather in U.S. trading on Thursday morning, with the price barely holding above $71,000 after challenging $74,000 a few hours ago.
- Crypto is declining even as the iShares Expanded Tech-Software Sector ETF (IGV) has risen more than 2%.
- Tomorrow brings the key U.S. jobs report for February as traders rapidly cut bets on any more Fed rate cuts in the first half of 2026.
Bitcoin’s price increase at the beginning of the week stalled when U.S. markets opened on Thursday, causing it to drop almost 2% in the last day to around $71,400.
This shift is happening as stock markets generally fall, and with the conflict in Iran showing no immediate signs of resolution, oil prices have jumped 5.3% to $78.70 a barrel. The Dow Jones Industrial Average has dropped 1.4%, and the S&P 500 is down 0.7%.
Despite overall market dips, the Nasdaq is holding relatively steady, down only 0.4%. This is largely due to a strong rebound in software stocks, which had been struggling recently. The iShares Expanded Tech-Software Sector ETF (IGV) has risen 2% and is up around 9% over the last five days.
This difference is significant because Bitcoin and the tech industry have often moved in the same direction. Both have fallen since October due to worries about how artificial intelligence will change things, and both have recently started to recover a bit.
New bull or bear market bounce?
Despite recently reaching $74,000, Bitcoin’s recovery isn’t guaranteed, according to Arthur Hayes, CIO of Maelstrom. He points out that it’s still closely linked to the performance of the IGV ETF, which tracks software companies. While there was a brief moment on Thursday where Bitcoin and software stocks moved in opposite directions – something crypto investors hoped would continue – it’s unclear if this change will last. Hayes cautioned that the recent price increase could be temporary.
Investors are potentially selling some of their holdings today before the important February jobs report is released on Friday. Recent economic data has generally been better than expected, which has reduced the likelihood of the Federal Reserve lowering interest rates anytime soon.
Traders at the Chicago Mercantile Exchange are now predicting a very high likelihood – 88% – that the Federal Reserve will hold interest rates steady, not just for this month, but also in April. This is a significant increase from last month, when the chance of no rate changes was estimated at 59%.
Bryan Tan, a trader at Wintermute, described the current market outlook as cautiously optimistic, but warned that global political risks require a careful approach. He noted that increasing investment into spot bitcoin ETFs – totaling almost $2 billion in the last week – and steady trading activity are helping to support prices. The limited market response to issues in the Strait of Hormuz suggests bitcoin could potentially rise to between $74,000 and $75,000.
According to analysts at Bitfinex, the recent price increase appears to be fueled by genuine buying interest in the market, not just speculative trading with borrowed funds. They’ve observed a significant rise in activity on the spot market, suggesting strong underlying demand.
Based on my analysis, if this current trend continues, I anticipate we could see some positive developments in the weeks and months ahead.
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2026-03-05 19:08