Is There Really a Connection?

Starting from just before mid-January, the price of oil began to rise again.

Around the same time, the price of Bitcoin dropped. 

Is there any kind of correlation by chance? 

To analyze this dynamic, it is necessary to examine two distinct aspects: the market price trends and the underlying dynamics (i.e., the fundamentals). 

Price Trends

The price of American oil (USOIL) began to climb starting January 8. However, it was only from the 12th of the same month that the rise became significant. 

To be honest, that day it only rose to $60 per barrel, which is a price level equivalent to that of the second half of November 2025. 

In fact, the peak of 2025 was reached just a few days before Trump’s inauguration at the White House at $80, but the monthly average at that time never exceeded $75. 

It should be noted, however, that starting from the peak in mid-2022, when it reached $120, it had almost consistently declined, ending its downward trajectory in December 2025 at $55. At that point, a technical rebound above $60 was also to be expected, so the movement in January was not unusual. 

On January 15, 2025, however, the price of Bitcoin began to decline, dropping in a few days from $97,000 to $89,000. 

This decline was unlikely caused by the slight rise in oil prices, but what happened afterward paints a different scenario. 

The Apparent Correlation

In fact, on January 27, the price of oil started to rise again, reaching $66 per barrel in just three days. 

During those days, the price of Bitcoin suddenly plummeted to $70,000, but starting from February 2, the apparent inverse correlation was interrupted. 

In fact, at the beginning of February, while the price of Bitcoin was dropping to $60,000, the price of oil was also declining, falling back below $63 on February 17. 

The following day, however, the price of oil began to rise again, while Bitcoin’s price started to fall. 

However, the rise in oil prices lasted only two days, while the decline of BTC had already begun on the 15th and continued until the 24th (a total of nine days). 

In fact, when the real surge in oil prices began at the end of February, the price of Bitcoin also rose in the first five days. 

Only from March 5, after oil had already surpassed $70 per barrel the day before, did the price of Bitcoin start to decline again. 

Moreover, that decline of Bitcoin stopped on March 8, while the price of oil began to rise again on the 10th. 

Therefore, it is only an apparent correlation, although there are fundamental dynamics that could justify some type of (indirect) link. 

The Connections

It is difficult to identify any sort of direct link between the trend of oil prices and that of Bitcoin. 

However, it is possible to envision at least two indirect correlations. 

The first, to be honest, is quite simple: if the price of oil rises significantly and rapidly, it ends up attracting the attention of speculators and their liquidity, effectively diverting it from Bitcoin. 

Since this should indeed be considered an (indirect) emotional correlation, or at most speculative, it makes sense for it to manifest only intermittently, and not consistently. 

In other words, during those days when the rapid rise in oil prices attracted more speculators, they became “distracted” from Bitcoin and perhaps even sold BTC to cash in liquidity to invest, for example, in WTI futures, the American oil. 

However, this is merely an occasional correlation, as on the days of the two recent peak prices of oil, Friday the 13th and Wednesday the 18th of March, the price of Bitcoin was above $70,000, which is above the month’s low recorded on March 8th. 

However, there is another underlying dynamic that may have had a significant impact, and it still concerns liquidity. 

Indeed, when oil prices rise, they inevitably attract some liquidity. This leads to a reduction of liquidity in other assets, regardless of speculation, and this inevitably ends up harming Bitcoin. 

The True Correlation

However, if the focus shifts from the short to the medium-long term, a true inverse correlation emerges. 

In fact, the more the price of oil increases, the more inflation rises, and if inflation remains high, the Fed will not be able to cut rates. 

In fact, if inflation were to rise significantly, it might even be forced to increase them again.

Interest rates have a direct impact on the circulation of money, and consequently on the liquidity that can enter financial markets, which ultimately affects the price of Bitcoin. 

However, this is not a short-term correlation at all, but only a medium to long-term one, given that it has been known for many weeks now that the Fed would not cut rates in March, and that it most likely will not do so in April either. 

Moreover, as of today, the markets continue to price in another rate cut before the end of the year, although until a few weeks ago they were pricing in two. 

The Real Reason Behind the Recent Decline

The fact is, however, the real reason for this week’s decline in Bitcoin’s price is another. 

It’s always about liquidity, but in this case, it’s particularly the liquidity drained from the markets by the US government that matters. 

According to official data from the U.S. Treasury, between Saturday, March 14, and Monday, March 16, the U.S. government drained more than 130 billion dollars from the markets. The effects of these movements, which are only felt in financial markets when they are significant, generally manifest two days later, and indeed the decline began on Wednesday. 

On Wednesday itself, the US government released more than 50 of those 130 billion drained at the beginning of the week in just one day, and this likely contributed to halting the decline.