Bitcoin recovers after briefly crashing below $30,000. Read here

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The world’s largest digital token, Bitcoin, rebounded from a swoon below $30,000 as a selloff in stocks eased and a bout of calm washed across global markets.

The cryptocurrency fell to $29,731 on Tuesday, its lowest level since July 2021, after dropping nearly 12% last week, its worst weekly loss since January.

Ether, the world's second largest cryptocurrency, at one point climbed 6.4%, while coins such as Solana and Avalanche were also in the green. 

The crypto recovery came as equities advanced across Europe, highlighting how the two asset classes are trading in tandem.

Bitcoin’s recent plunge has taken it to levels last seen in the middle of 2021, reversing a bull market that peaked in November. Whether the calm will last is an open question. 

Tightening monetary policy to combat runaway inflation is curbing liquidity, creating a formidable obstacle for speculative assets like cryptocurrencies. 

WHAT HAPPENS IN A RECESSION?

It is not just crypto markets that are tumbling. Equity markets have also plunged as investors fear global central banks are willing to push economies into recession, if necessary, to rein in inflation.

"What's interesting is that bitcoin itself hasn't declined quite as much as the Nasdaq and some other asset classes, but the correlation has tightened between them. It's certainly a higher correlation than we've seen in the past," said Benjamin Dean, director of digital assets at WisdomTree in London.

The Nasdaq and S&P 500 posted their fifth straight week of declines last week and the Dow Jones its sixth. It was the longest losing streak for the S&P 500 since mid-2011 and for the Nasdaq since late 2012.

Crypto's correlation with stocks is one reason for its recent crypto sell-off.

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