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This week, Brent crude oil recorded its deepest weekly drop in recent months, plunging 9% and falling below the $80 per barrel mark. However, Bitcoin reacted to this event with striking indifference, slipping only 1%. This price divergence calls into question the established view of a strong link between the "black gold" market and the digital asset. Many traders and analysts have long considered this correlation an unshakable market rule, but reality has proven more complex.

Some market participants traditionally view the decline in energy prices as a "green light" for a subsequent rebound in the cryptocurrency market. However, the real intrigue lies not in oil quotes, but in inflation indicators, exchange position distribution, and the behavior of miners themselves.

Why traders link Bitcoin's bottom to falling oil prices

The drop in oil prices occurred after the US and Iran agreed to resume operations in the Strait of Hormuz. A common view among traders is that after a sharp decline in oil, Bitcoin often forms a global bottom. Some expect a new rise in oil prices in the second half of the year due to a possible escalation between Iran and Israel, as well as the anticipated introduction of fees for passage through the Strait of Hormuz. According to their calculations, it is this oil rebound that could trigger another wave of Bitcoin sell-offs and form the year's low.

The risks of such scenarios cannot be dismissed. Iran has just suspended 60-day negotiations with the US — this could push prices up again. But the link between oil and Bitcoin is based only on isolated episodes: looking at data over the past five years, no significant correlation is visible.

Five-year data: the link between Bitcoin and oil is illusory

The mathematical correlation between Bitcoin and oil over the past five years is only 0.036. Recall that this coefficient ranges from +1 (complete alignment of trajectories) to -1 (strictly opposite movement). Thus, the current level of 0.036 clearly demonstrates the complete absence of a stable relationship between the assets in question.

Even when broken down into different market phases, both indicators remain extremely close to zero. This leads to the conclusion that there is no serious investment relationship between the assets under any conditions. The latest 30-day indicator has dropped to -0.21, indicating a short-term divergence in opposite directions, but the overall link remains very weak.

The chain of macroeconomic influence from energy to digital assets is largely broken. Fuel costs do affect inflation expectations with a significant coefficient of 0.41. However, the impulse almost completely fades and does not reach the real yield of US government bonds after inflation. Since bond yields themselves have a weak impact on cryptocurrency, the final signal is ultimately lost along this long path.

Currently, the US Federal Reserve exerts a much more powerful and direct influence on financial markets. The new head of the agency, Kevin Warsh, decided at the June 17 meeting to keep the base interest rate unchanged. At the same time, nine of the eighteen members of the US regulator forecast a rate hike during 2026.

When oil rose, time-tested Bitcoin investors did not panic

Historical examples clearly confirm this thesis. When Brent crude rapidly rose to its local peak of around $119 in late March, the price of the leading cryptocurrency did not fall but showed enviable stability. During this same period, long-term investors holding coins in wallets for more than 155 days steadily increased their positions. Their net purchase balance remained consistently positive until the start of June.

Perhaps the only direct economic link between these industries lies in the mining sector. Electricity is the main resource for cryptocurrency mining, so abnormally high energy costs can reduce business margins. Nevertheless, the total network hashrate, reflecting the overall computing power of equipment, has been steadily increasing recently. This occurs despite the decline in WTI crude prices. Such growth in computing power amid cheaper resources indicates miners' fundamental belief in the industry's long-term prospects. Notably, the network's computing power remained almost unchanged even during the March rally in the hydrocarbon market.

Since major investors and miners demonstrate high resilience, the source of current pressure must be sought elsewhere. The main catalyst is the derivatives market.

Where the pressure on Bitcoin comes from

Key warning signals are now clearly visible in the derivatives sector. Bitcoin's open interest indicator, reflecting the total value of active futures contracts, increased from $21.83 billion to $23.45 billion since June 11. Simultaneously, the funding rate for futures sharply changed, moving from a positive zone around +0.0023% into negative territory around -0.002%.

Recall that funding represents regular payments between long and short traders to balance the price. A negative funding rate means sellers are forced to pay buyers to maintain their positions. This dynamic vividly reflects the predominance of bearish sentiment. The increase in open contracts alongside the falling rate indicates that speculators are actively opening short positions rather than rushing to buy the current dip.

There is important market logic in this situation. If cheaper commodities were truly a powerful driver for cryptocurrency growth, exchange players would be massively opening long positions. However, in practice, short positions currently dominate. This situation creates ideal conditions for a short squeeze. In such a scenario, any random upward impulse will force bears to panic-close their positions and buy back coins, leading to an avalanche-like rise in quotes.

And here lies the main mental trap for investors. If a short squeeze does occur, many commentators will rush to explain the price surge by falling oil prices. Although, in reality, the upward movement will be triggered solely by the technical closing of margin positions, and not by commodity factors. At the same time, the overall backdrop will remain negative, making the impulse short-lived.

My analysis is unequivocal: the link between Bitcoin and the oil market is too weak to have a real impact on quotes. While Brent trades around $79 per barrel, Bitcoin holds the $62,800 level. This mark is approximately half of the historical October high of $126,200. It is clear that the next powerful price impulse for cryptocurrency will be dictated not by the cost of a barrel, but by US Federal Reserve decisions and conditions in the derivatives market.