Although Bitcoin was born as a decentralized alternative to the traditional financial system 🏦⚡, its price continues to react sharply to macroeconomic news such as decisions by the FED 💵📉, trade wars 🚨🌐, or inflation reports 📈.
🔥 What’s the reason?
1️⃣ 🤝 Institutions and Traders Cross Borders: Large funds and traders operate in both markets (traditional and crypto). When the FED raises rates or there are geopolitical crises, they rebalance portfolios by selling risky assets... including BTC!
2️⃣ 🎭 BTC Duality: Risk Asset or Safe Haven?
- 📉 In stock market crises, it correlates with tech stocks (NASDAQ).
- 🛡️ But in monetary collapses (e.g. Argentina, Venezuela), it acts as digital gold.
3️⃣ 📡 Digital DNA Does Not Erase Human Psychology.
Fear/greed in response to macro news moves markets...
Technical decentralization does not isolate BTC from global economic forces. As long as humans with emotions trade it, it will continue to be a mirror of the macroeconomy 🌍↔️📊.
📌 Did you know?*
- In 2022, BTC and the S&P 500 had their highest correlation in history (0.8).
- 70% of BTC's sharp movements coincide with key macro events.