Bitcoin rallies 16% to 24% after oil surges 19%

Bitcoin (BTC) has historically shown a pattern of rallying following significant oil price surges, despite being generally considered a risky asset during periods of geopolitical uncertainty. This pattern presents a compelling opportunity for traders to capitalize on market dislocations.

Historical data indicates that Bitcoin often experiences sharp, temporary corrections in response to oil price spikes. For instance, in the recent rally to $77 per barrel, Bitcoin declined from $110,200 to $102,800. This inverse relationship is evident in the 15-minute price chart, where Bitcoin's price dropped as WTI crude rose 19% between Wednesday and Friday. However, a broader time frame reveals a different story.

Over the long term, there is no consistent correlation between Bitcoin and oil prices. The relationship fluctuates considerably, but episodes of extreme oil price appreciation have coincided with sharp Bitcoin corrections. In the past year, this pattern has occurred three times. Each instance was followed by a rebound in Bitcoin’s price, with gains ranging from 16% to 24% within eight days of the initial drop.

In one notable instance, on Jan. 15, 2025, oil surged to $80.50 from $72.50 just six days earlier. This spike coincided with a Bitcoin drop to $89,300 on Jan. 13, followed by a 22% rally to $109,300 by Jan. 20. The move came after the United States imposed sanctions on Russia’s oil sector, while US crude inventories declined for eight consecutive weeks.

Earlier, on Oct. 8, 2024, oil prices jumped to $77.50 from $68.00 the week before. Bitcoin initially corrected to $58,900 on Oct. 10 but then advanced 16% over the following eight days. The rally to $68,960 rewarded traders who capitalized on the volatility triggered by the Oct. 7 terrorist attacks in the Middle East.

A similar pattern occurred on Aug. 13, 2024, when oil rose to $80 from $74 after Libya temporarily shut down key oil fields. Bitcoin fell to $56,150 by Aug. 15 but rebounded 16% within days, reaching $65,000 by Aug. 23.

While there is no guarantee that this trend will persist, oil prices have once again climbed to five-month highs. Historical data suggests that Bitcoin’s current level near $102,800 could present another attractive entry, potentially targeting a 16% gain to $119,200 by June 21. This pattern aligns with the prevailing view of Bitcoin as a risk-on asset, not a defensive hedge, and offers insights into potential future price movements.