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In a similar vein to the stock markets, the crypto market saw some upside recovery momentum on the back of U.S. Federal Reserve chair Jerome Powell's reiteration that the Fed is committed to combating the current levels of inflation. BTC rallied as high as $43k before falling back slightly to the upper $42k bound that it is currently trading at. A key bullish trend line has been formed on the BTC hourly chart, hinting at the possibility of further upside action in the near-term. On the on-chain front, there are some positive signs too. BTC's dormancy inflow, for one, suggests that a strong rebound could be in order. The ratio of the current market capitalization and the annualized dormancy value offers a rough gauge of market lows and assesses the current market condition by determining whether the broader trend is leaning in favor toward the bulls or the bears. As can be seen from the chart above, BTC has entered the buy zone — a bottom signal that has only appeared five times since BTC's inception. One thing to note though, would be the fact that the Puell multiple, a metric that tracks BTC's supply-side, has been consistently seeing higher lows in recent times, and has yet to hit levels that would indicate a bottom formation. So how this all plays out for BTC remains to be seen. On the major altcoins front, most have largely flipped green ahead of the CPI release, with leading tokens such as LUNA and MATIC posting more than 7% gains in the past 24 hours.
For the past decade, BTC has managed to remain decoupled from other major risk assets and has also generally stayed outside of the purview of the traditional financial industry. However, the past year has witnessed a growing tendency for BTC to mirror price actions within the equities market as more investors are starting to include crypto within their portfolios. This has become a cause for concern amongst many officials within the International Monetary Fund (IMF), who contended that the interconnectedness between crypto and stocks poses a contagion risk across financial markets. The IMF officials note that the correlation between crypto and stocks extend to developing countries as well, thus posing greater risks to emerging economies with widespread crypto adoption.