There’s no denying the fact that the crypto market has been faced with an obscene amount of bearish pressure over the last eight odd months. Despite this, September has been especially turbulent for the industry, with the price of Bitcoin (BTC) dropping below the all-important $20,000 psychological threshold before forging a comeback.
While these dips have called into question the asset’s status as digital gold and a hedge against inflation, a key question worth examining is how deeply intertwined the crypto market with the global economy is.
To this point, historic inflation numbers have driven the price of everything under the sun — from fuel to food — to record highs. And, despite the S&P 500, a stock market index tracking the performance of 500 large companies listed on exchanges in the United States, being down year-to-date (YTD), its performance has been better than that of the crypto market by a decent margin.
Charmyn Ho, head of crypto insights for cryptocurrency exchange Bybit, pointed out to Cointelegraph that just like any other market, the crypto industry is currently being subject to volatilities brought about by macroeconomic factors, adding:
On the recent recovery above $20,000, Ho noted that whether this is a trend reversal — after a recent confluence of on-chain metrics hinted at a bottom formation — or just a temporary attempt to flush out excessive leverage is still too early to tell. Reflecting on historical data, she believes that the prolonged duration of BTC’s current dormancy may indicate the formation of a reliable floor price, which can help pave the way for the next bull trend.
Ajay Dhingra, head of research and analytics at crypto exchange Unizen, told Cointelegraph that rising inflation has
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