At a time when the US economy has been hit with a double whammy of inflation and weakening growth, and it is there that a huge amount of liquidity, Bitcoin responded with a 3% increase.
BTC intraday high on March 13 amounted to $73,838, and $4000 in a day is a pretty solid gain for an asset that is generally considered to be subject to the Fed’s actions.
Efirium not far behind, adding 3,9% in a day and rising above $2100. Solana showed the strongest growth among major tokens at 4,7%, which increased the price to $90.
Interestingly, price dynamics are completely out of line with sentiment. Fear and Greed Index in cryptocurrencies is at the 15 mark, which corresponds to the «extreme fear» level. Last week, it was 18, which also corresponded to the «extreme fear» level. Thus, prices are rising while sentiment remains low. The discrepancy is curious.
A Fear and Greed index of 15 is a typical reading seen during capitulation or just before sharp reversals. A rising price indicates that retail investors are nervous, but institutional investors are relentlessly buying on fear.
It is worth noting that in 2024 Bitcoin moved away from traditional risk assets. The perception of cryptocurrency has shifted fromkriptovalyuta «It’s a leveraged investment in technology» is being replaced by the narrative of «digital gold with high growth potential.» Whether this perception will hold true during a real recession remains to be seen.
What investors should pay attention to
Stagflation is a real situation that creates a challenging environment for every asset class. Stocks don’t like rising prices, nor do bonds. Gold performs well in this environment; Bitcoin’s performance somewhat follows gold’s, but in a much more volatile manner.
So far we can say that Bitcoin It weathered a nasty macroeconomic crisis, and this resilience is indicative in its own way. But with the Fear and Greed Index at 15 and the rising risks of stagflation, it feels more like a deep breath before something bigger happens in both directions.