Bitcoin’s price trend has moved in line with the stock market in recent months as both struggled with macroeconomic issues; Problems that are the result of a sudden increase in the inflation rate and raising the bank interest rate. Of course, Bitcoin price volatility seems to be decreasing compared to the stock market; Because now we are seeing signs of decreasing correlation between these assets.
To Report Finbold, data published by ZeroHedge shows that the volatility of the Dow Jones index, which measures the performance of the stocks of 30 largest American industrial companies, has recently been higher than that of Bitcoin.
Although Bitcoin ranks among the most volatile assets to invest in, its recent performance reflects its evolving nature. Bitcoin fans believe that the evolution of this digital currency will be characterized by widespread acceptance; When the price volatility of this asset decreases and it is traded like other common assets of the financial markets.
Historically, price volatility has hurt Bitcoin a lot. In contrast, traditional financial markets have typically been much more stable than this digital currency. However, Bitcoin’s reduced volatility can be attributed to the recent fall in price from its all-time high of $68,000; After that, we have witnessed the stabilization of the price of this asset in the $20,000 range for weeks.
The current level is considered to be a temporary price floor for Bitcoin after it made a significant rally to its all-time high of around $68,000 in late 2021. At the same time, the increase in the strength of the dollar and the depreciation of other fiat currencies in comparison to it helped to reduce the volatility of Bitcoin. The increase in the value of the dollar along with the fall in the price of commercial goods can also potentially have a negative effect on the stock market.
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In this situation, Bitcoin has maintained its stability, while in some countries it has attracted the attention of investors as a cover against the sudden increase in prices.
Meanwhile, Bitcoin continues to stabilize below $20,000 as buyers and sellers struggle to gain control of the market. At the time of writing, Bitcoin is trading almost unchanged from the previous day at $19,300.