Bitcoin (BTC) came close to breaking through $52,000 Wednesday morning in New York after two days of hovering around the $50,000 level. The largest cryptocurrency lost as much as 2.8% Tuesday following the latest consumer price index reading, which showed annual inflation currently sits at 3.1%, higher than economists had predicted.

Bitcoin’s turnaround though is a sign that the asset follows both a risk-on and risk-off narrative, Noelle Acheson, author of the “Crypto is Macro Now” newsletter, said.

“I’ve been saying for some time that when we get sharp stock market corrections, bitcoin is also likely to suffer as it tends to get dumped along with most other liquid, high-volatility assets in investors’ rush for the door,” Acheson said. “It probably never will totally decouple from the macro narrative — when held as part of a macro portfolio, it will at times be treated as a risk asset because there will always be some investors that see it through that lens.”

Monetary easing, when it eventually comes, will still push bitcoin higher, Acheson predicts. However, she said that investors are still likely to turn to the cryptocurrency when market conditions turn perilous.

“Bitcoin is a risk-off asset, with a strong potential to act as a hedge against currency debasement and geopolitical turmoil,” she added.

Ether (ETH) similarly was in the green Wednesday, gaining close to 5%. The cryptocurrency is now up around 16% over the week.

Stocks were on the rebound Wednesday, although the S&P 500 and Nasdaq Composite indexes have not yet regained losses spurred by Tuesday’s CPI print. At time of publication, the S&P 500 was up around 0.5% and the Nasdaq Composite gained about 0.7%.

After markets digested the CPI print in the US, inflation data from the United Kingdom came in lower than expected, showing prices are holding steadily at 4% higher year-over-year. The more positive inflationary data helped stock futures rise ahead of Wednesday’s open, Tom Essaye, founder of Sevens Report Research said.

It’s important to realize that while the hot CPI was the catalyst for yesterday’s stock and bond market declines, stocks didn’t decline because CPI implied inflation was bouncing back,” Essaye said. “Instead, the reason stocks dropped was because the CPI report was the first data point in 2024 to not confirm these fantastically positive assumptions that have driven this rally.”