The week was full of surprises even for those who were not part of CryptoKitties. Bitcoin [BTC] And other cryptocurrencies continued their climb.
Now that Bitcoin is above an all-time accumulation signal, the question is, can it reclaim its title as an inflation hedge?
bitcoin fights back
Earlier this week, after a 75 bps Fed Reserve rate hike, the Biden administration confirmed that the country had entered a technical recession. The situation worsened after the country’s GDP shrank for the second consecutive quarter. However, the crypto market recovered over $124 billion in the same period between July 26 and press time.
Bitcoin benefited from bullish signals in the broader market. It rose from the $19k low to $20k and can be seen trading at $23,919 at the time of writing.
investor hold
Additionally, as of now, two significant developments are on the horizon for bitcoin. The first is a correction of the 23.6% Fibonacci level and the second the exit from the market bottom.
The gradual uptrend from the June lows helped bitcoin continue its upward move to the current trading price and Fibonacci levels, from the lows to the April market tops, with BTC’s next important stop at $26k.
This price point is slightly above the 23.6% Fibonacci line, which is important for BTC as it could provide support for Bitcoin to extend its rally. Secondly, according to the market cap of King Coin, the recent rally has enabled it to pull itself out of the bottom of the market, which reaches BTC when the asset is overvalued. It’s a win for Bitcoin, after staying at it for more than a month for the first time in 28 months.
Thus, with the win comes concerns about the future of BTC as the coin and crypto markets are not operating separately. The correlation of the King Coin stock with the stock index is still quite high as both the NASDAQ and S&P 500 indexes have risen similarly over the same period this week.
Thus, despite the recovery, bitcoin is still not in a position to act as an inflation hedge. This makes investors more vulnerable due to deteriorating economic conditions.