Another Red Daily Close Puts Bitcoin Below $23,000, Is Recovery Expected?

Bitcoin closed another day in red after an incredible rally over the past week. It has now lost almost all of the gains from this period, and is currently below $23,000. With the recession’s news, momentum quickly waned. Given its performances so far this year, it is now questionable whether the hedge can be sustained as an inflation-control tool.

Is Bitcoin Still A Good Bet?

The inflation hedge that Bitcoin offers has made it a popular digital asset. The reason for this is its year-overyear performance compared to other financial market over the same time period. These financial markets such as stock market have not been able to keep pace with high inflation rates. Investors rushed to bitcoin to get yearly returns that exceeded the inflation percentages.

That is, until a bear market where bitcoin’s performance as an inflation hedge starts to shake. One example is the current bear market in bitcoin. The digital asset has lost approximately 44% over this period, while inflation is still at 40 year highs. But on a month-to-month basis, bitcoin has outperformed prominent markets such as the S&P, giving credence to its ability to give reasonable returns even during a bear market.

Bitcoin price chart from

BTC has another red close daily | Source: BTCUSD on

Bitcoin has been up more than 20% in the last month, while the S&P is up only 8%. However, bitcoin is still up more than the S&P at 5.8% annually. Bitcoin has been a great option to hedge against inflation but it is still a viable investment choice for those with high-risk appetites.

The Market Sentiment Factors Are Key To Recovery

Market sentiment was soaring into fear after the crypto market crashed in June. As cryptocurrencies suffered from a decline in value, this fear would last for several weeks. But, this would change quickly when bitcoin’s price saw an immediate recovery back in July.

Bitcoin reached $24,000 again, which has rekindled investor confidence. Sentiment had recovered along with the price and towards the end of the month had grown to a high score just below 30 on the Fear & Greed Index. This still placed it in fear territory, but this was an amazing recovery in sentiment.

Despite the drop in bitcoin prices, data still shows investors have a positive view of digital assets like it. A positive mood drives accumulation and recovery. Bitcoin needs to stay above the $22,700 resistance and open at a higher level in order for it to rebound above $23,000.

Featured Image from Outlook India. Chart from

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

Get more Crypto News at CFX Magazine