Just as everything was falling there was a sudden bounce off the lows. Bitcoin (blue line) actually bounced slightly before the stocks and crude oil, but what's clear here is that the nascent asset is moving inline with the risk assets, almost to a T.
To fully grasp why it wold do that, we really need to understand the reasoning behind the market's behavior these last few weeks. Mainly, that they've been ignoring risk due to the promise of free money. Meaning, corporate profits will be ok in the long run because they'll always be able to borrow more money. This white lie has allowed all risk assets to continue to rise, including bitcoin.
Meanwhile, the risk was being priced in elsewhere. Namely, in the safe haven assets. Gold, bonds, and yup you guessed it, bitcoin.
The declines so far this week have mainly been focused on profits and earnings. The realization that if the risks do end up growing free money might not be enough to get us where we need. So we see some declines.
Bitcoin however, is not a safe haven against declining profits. It's a safe haven against inflation, geopolitical strife, and central banks. So far, the stocks don't seem to have realized any of these threats.
This is how I see the recent activity lately anyway. You're more than welcome to agree or disagree. Have a wonderful day.
Best regards,
