This week has been filled with surprises, even those that have not been in the crypto niche. Bitcoin [BTC] and other cryptocurrencies continued their ascent.
Now that Bitcoin is above a historic accumulation signal, the question is, can it reclaim its inflation hedge?
Bitcoin Strikes Back
Earlier this week, after the Fed Reserve rate hiked 75 basis points, the Biden administration confirmed that the country had entered a technical pullback. After the country’s GDP contracted for the second consecutive quarter, the situation worsened. However, the crypto market recouped over $124 billion in the same span between July 26 and press time.
Bitcoin provided broader bullish signals from the market. It went from $19,000 to $20,000 and could pay out at $23,919 at the time of writing.
The investor’s problem
Additionally, there are two significant developments looming on the horizon for Bitcoin right now. The first being the recovery of the 23.6% Fibonacci level and the other being the escape from the market bottom.
The gradual tilt from the June lows has helped Bitcoin grow sustainably and reach the current trading price and Fibonacci level from the lows to the April market top shows that BTC’s next critical stop will be of $26,000.
This price sits slightly above the 23.6% Fib line, which is crucial for BTC as it can provide the support Bitcoin needs to complete its rally. Second, according to the centerpiece’s market value, the recent rally has allowed it to break out of market lows, which BTC hit when the asset is heavily undervalued. After lingering in the same pendant for over a month for the first time in 28 months, it’s a win for Bitcoin.
So, with the victory comes concern for the future of BTC as the coin and crypto market does not act individually. The correlation that the king coin shared with stock indices is still high, as the NASDAQ and S&P 500 indexes rose equally over the same span this week.
So, despite the recovery, Bitcoin is still unable to act as an inflation hedge. This makes investors much more vulnerable due to the deterioration of the economic situation.