Crypto may be in for a lopsided month as inflation concerns come back into focus. Bitcoin and ether started the new trading month on a positive note – after a flat month – each rose less than 1% on Wednesday. Meanwhile, the stock market extended its slide from the previous session. A modest February pales in comparison to January’s big surge, but many investors still see it as a winning month. Bitcoin eked out a monthly gain of 0.8% and ether inch up 2.5%, while all major stocks on average posted losses for February. “Bitcoin has been the beneficiary of the flight-to-quality in crypto,” said Callie Cox, US investment analyst at eToro. “If you’re a stock investor, you can see bitcoin as this growth engine without a clear cash flow. But if you’re a crypto investor who has been pressured by the dramatic selloff in altcoins, bitcoin can be seen as this blue chip store. value.” “Everything is relative, but from a portfolio strategy perspective, you cannot ignore the risks involved in crypto,” he added. “We still think bitcoin can struggle in a high-inflation, high-rate environment.” Bitcoin’s correlation with stocks has reversed in 2023. However, Katie Stockton, chart analyst and founder of Fairlead Strategies, told CNBC earlier this week that if equities are down now, she expects the correlation to return. Meanwhile, Rob Ginsberg, a technical analyst at Wolfe Research, noted that bitcoin and the US dollar index have moved higher together, even though they usually move inversely. “It’s a possibility one must give. In short words, we bet on the dollar pulling back,” he said there. “It’s an interesting tape to say the least,” he added, noting the dollar and higher rates, deteriorating commodities and volatile equities. “Even with the recent overbought pullback, crypto continues to hang in there and consolidate.” He also said that “the fun is over, the charts are different.” “We are buyers of this pullback and see it as a healthy response to the recent overbought condition. If we are right and higher in the future in the near future, it is difficult to think that crypto will not be the main beneficiary.” What to watch Although industrial developments accounted for most of the trading action in February, the Fed’s fight against inflation was still very much in focus, Kruger said. He cited inflation as well as regulatory and institutional adoption — two big price drivers in February — as key catalysts heading into March. Bitcoin and ether experienced brief declines of 6% and 8.5%, respectively, after US regulators came out with a series of enforcement actions against crypto companies. Long-term investors see the regulation as a positive development in the end, but it could pressure prices in the near future, said Kruger. “These things bring some uncertainty into the equation, and uncertainty can be, you know, negative,” he said. Cox said he was looking ahead to the big economic report as well as the Fed’s next policy meeting, which starts on March 21. ,” he said. “The main concern for investors over the past few weeks has been the resumption of rising inflation, and how the Fed will respond. rally we saw in January.” Breaking through $25,000 Although bitcoin held in February, investors are not sure when to expect a rocket ship rally . Stockton and Joel Kruger, market strategist at LMAX Group, both emphasize $25,000 as the upper level to give more meaning for earnings. Currently trading at about $23,400, according to Coin Metrics. “When we poked above it most recently it was opened in February, we just could not establish the top,” he said. “When we are below $25,200 there is still a possibility that this market continues pull back and consolidate and we’re not ready to see that big breakout.” “Everything has been constructive and we’re holding up well, but we really … need to see a weekly close above that high to feel really excited about the prospect,” he said.