Bitcoin traded under the psychologically important $40,000 level at press time on Thursday evening, with the global cryptocurrency market cap falling 4.35% to $1.75 trillion.
|Bitcoin (CRYPTO: BTC)||-6.1%||-5.6%||$39,300.01|
|Ethereum (CRYPTO: ETH)||-4.3%||-5.2%||$2,596.16|
|Dogecoin (CRYPTO: DOGE)||-3.8%||-8.1%||$0.12|
|Cryptocurrency||24-Hour % Change (+/-)||Price|
See Also: How To Buy Bitcoin (BTC)
Why It Matters: On Thursday, the U.S. Labor Department released inflation numbers for February. Headline consumer price index or CPI rose 7.9% in the month, above an estimated 7.8%, the biggest increase since January 1982.
Risk assets moved lower after the inflation data. The S&P 500 and the Nasdaq closed 0.4% and 0.95% lower at 4,259.52 and 13,129.96, respectively.
Cryptocurrencies moved in line with stocks and headed downwards. However, some analysts are of the view that the apex coin may emerge as a hedge against inflation.
“Maybe the short-term price will drop due to panic, but long-term I think #Bitcoin is by far the best bet against inflation,” tweeted Michaël van de Poppe, a cryptocurrency trader.
Maybe short-term price will drop due to panic, but long-term I think #Bitcoin is by far the best bet against inflation.
— Michaël van de Poppe (@CryptoMichNL) March 10, 2022
The co-founders of on-chain analysis company Glassnode, Jan & Yann, tweeted that commodities look strong and there is a “rotation to value.”
A chart shared by them, depicting the top 10 assets by market cap, reveals a 15% decline in the year-to-date performance of Bitcoin, while gold shot up 14%.
The top 10 assets by market cap reveal strong commodities and rotation to value
— Negentropic (@Negentropic_) March 10, 2022
Meanwhile, the put/call ratio for Bitcoin hit a six-month high of 0.69 in February amid bearish market sentiments, according to Delphi Digital.
On Thursday, the volume-adjusted put/call ratio hit a monthly low of 0.44 as call volumes rose. Deribit traders were buying April 29 BTC calls for $42,000, $50,000 and $60,000 strikes, Delphi said, boosting the notional value up to $193 million on the exchange.
“This might indicate that traders are turning bullish, even in an uncertain macro environment.”
BTC Options Open Interest Vs BTC Put/Call Ratio For Open Interest and Volume — Courtesy Glassnode
Ethereum has formed a stronger correlation with the S&P500 index than Bitcoin over the past month. Gold has a “spot-on” inverse correlation with the two largest cryptocurrencies by market cap, according to financial market data and content platform Santiment.
#Ethereum is staying surprisingly close to the price of the #SP500. In fact, its correlation has been much more tight than #Bitcoin‘s own correlation with the #SP500 over the past month. Also, #gold has had a spot-on inverse correlation to both. https://t.co/3TJH7zwjcd pic.twitter.com/BPatTroxGW
— Santiment (@santimentfeed) March 10, 2022