BBC: The connection between bitcoin and oil is a myth: 5 years of data prove that markets live their own lives
Many traders and analysts are accustomed to believing that there is some fundamental connection between oil and bitcoin. However, this week has clearly shown how outdated this misconception is. While Brent crude oil experienced its deepest weekly drop in recent months, losing about 9% and falling below $80 per barrel, bitcoin fell by only 1%. This price gap calls into question the strength of this historical correlation.
Some market participants traditionally view the cheapening of energy resources as a green light for a subsequent rebound in the cryptocurrency market. However, the real intrigue, as I see it, lies not in oil quotes, but in inflation indicators, the distribution of positions on exchanges, and the behavior of the miners themselves. These factors are currently dictating the dynamics, not the cost of a barrel.
Five-Year Perspective: Correlation is Zero
If you look at data over the past five years, the mathematical correlation between bitcoin and oil is a laughable 0.036. Let me remind you that the coefficient is measured from +1 (perfect match) to -1 (strictly opposite movement). The current level of 0.036 is not just a low indicator; it is direct proof of a complete lack of a stable relationship between these assets. Even when dividing into phases of a "calm market" and "high volatility," both indicators remain as close to zero as possible.
The latest thirty-day indicator has dropped to -0.21. This indicates a short-term divergence in rates in different directions, but the overall connection still remains extremely weak. In simple terms: no historical scenario allows the use of oil quotes as a reliable leading indicator for cryptocurrency. Currently, the US Federal Reserve System has a more powerful and direct impact on financial markets. Rate decisions affect bitcoin faster and more strongly than events in the oil market.
Behavior of "Smart Money": Miners and Long-Term Holders
Historical examples clearly confirm this thesis. When Brent crude was rapidly rising to its local peak of around $119 at the end of March, the price of the leading cryptocurrency did not fall but demonstrated enviable stability. During the same period, long-term investors, holding coins in wallets for more than 155 days, were steadily increasing their positions. Their net purchase balance remained consistently positive until the beginning of June. This behavior represents an important reversal after major sell-offs in the second half of 2025.
The only direct economic link between the industries lies through the mining sector. Electricity is the main resource for cryptocurrency mining, so an abnormally high cost of energy resources can reduce business profitability. Nevertheless, the total network hashrate, reflecting the overall computing power of equipment, has been confidently increasing recently. This is happening despite the fall in the price of WTI crude. Such growth in power amid the cheapening of resources testifies to the fundamental belief of miners in the long-term prospects of the industry. Computing power remained virtually unchanged even during the March rally in the hydrocarbon market.
The True Source of Pressure: The Derivatives Market
Since large investors and miners are demonstrating high resilience, the source of the current pressure needs to be sought elsewhere. The main catalyst is the derivatives market. Key warning signals are now clearly visible in the sector of financial derivatives. The open interest indicator for bitcoin has increased from $21.83 billion to $23.45 billion since June 11. At the same time, the funding rate has sharply changed, moving from a positive zone of about +0.0023% into a negative area around -0.002%.
A negative funding rate means that sellers are forced to pay buyers to hold their positions. This dynamic clearly reflects the predominance of bearish sentiment. The increase in the number of open contracts along with the drop in the rate indicates that speculators are actively opening short positions, rather than rushing to buy the current dip.
There is an important market logic in this situation. If cheapening raw materials were indeed a powerful driver for cryptocurrency growth, exchange players would be massively opening long positions. However, in practice, short positions currently dominate. The current picture creates ideal conditions for a short squeeze. 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 hasten to explain the rise in the rate by the fall in oil prices. Although in reality, the upward movement will be triggered solely by the technical closing of margin positions, and not at all by commodity factors. At the same time, the overall background will remain negative, causing the impulse to be short-term.
My conclusion as an analyst: As of today, the connection between bitcoin and the oil market is too weak to have a real impact on quotes. While Brent is trading around $79 per barrel, bitcoin is holding the $62,800 level. It is obvious that the next powerful price impulse for cryptocurrency will be dictated not by the cost of a barrel, but by the decisions of the US Federal Reserve and conditions in the derivatives market. Investors should focus on these factors, rather than outdated notions of commodity correlation.