<div><span style="font-size: 1rem;">It's been a good month for bitcoin - and we haven't said that for a while.</span><br></div><div><br></div><div>After months of freefall, it jumped more than 17% in July, its best performance since October. Ether rose 57%, its strongest monthly gain since January 2021.</div><div><br></div><div>The rally was in step with gains of riskier assets such as stocks as investors bet that economic weakness could deter the Fed from aggressively tightening monetary policy.</div><div><br></div><div>Bitcoin's 40-day correlation to the tech-focused Nasdaq (.IXIC) now stands at 0.90 - up from 0.41 in January - where 1 means their prices move in perfect lockstep.</div><div><br></div><div>The leading cryptocurrency has been consistently positively correlated with the Nasdaq since late November, unlike in previous years where it would routinely turn negative, meaning they moved in opposite directions.</div><div><br></div><div>Itai Avneri, deputy CEO at cryptocurrency trading platform INX, described July's convergence as "good news".</div><div><br></div><div>"It means institutional investors are looking at bitcoin like any other asset," he said. "When the market turns - and it will turn – these institutions will come back and invest in crypto."</div><div><br></div><div>Gains were not limited to bitcoin, as the value of the global cryptocurrency market crept back above $1.15 trillion last month, adding over $255 billion since the end of June, CoinGecko data showed.</div><div><br></div><div>Assets under management in digital asset investment products rose 16.9% to $25.9 billion in July, reversing June's decline of 36.8%, according to research firm CryptoCompare.</div><div><br></div><div>However, trading has been thin - indicating plenty of investors gauge it's too early to turn bullish in a deeply uncertain macro backdrop with inflation rampant, and America and Europe staring down the barrel of a recession, not to mention the implosion of some big crypto players.</div><div><br></div><div>Average daily volumes across all digital asset investment products fell by 44.6% to $122 million, the lowest since September 2020, CryptoCompare found.</div><div><br></div><div>"On a medium-term horizon, we're bearish (on crypto) despite the current bounce, this aligns with our stance on equities," researchers at MacroHive wrote on Friday, citing inflation, recession risks and rate hikes.</div><div><br></div><div>A long way from $60,000</div><div><br></div><div>Bitcoin is currently trading at $23,336, consolidating around the $24,000 mark after touching that level last week.</div><div><br></div><div>It will likely continue to trade in a tight range of around $20,000, plus or minus 10% to 15%, until there is more clarity over the economy's trajectory, according to Chris Terry, vice-president at lending platform SmartFi.</div><div><br></div><div>"We could be in this stalled market for weeks and weeks."</div><div><br></div><div>On the flip side, if the United States enters a prolonged recessionary period and the Fed is forced to cut interest rates, bitcoin could benefit, said Russell Starr, CEO of Valour, which creates exchange-traded products for digital assets.</div><div><br></div><div>"You're going to have to see another quarter of recession before you see a resumption back up to the lofty $60,000 levels," he said.</div><div><br></div><div>For investors who dove into crypto during its surge at the height of pandemic-era easy monetary policy, the next several months could be quite bumpy, according to Adrian Kenny, senior sales trader at GlobalBlock.</div><div><br></div><div>"There is still an undoubtedly considerable mountain to climb in terms of 'normality' or the hopes of a return to the highs of 2021 anytime soon." -Reuters</div><div><br></div><div>bnbd24/TR</div>