Equities wrapped up Tuesday in the red zone as inflation printed slightly hotter than expected. Here's what traders are parsing: when traditional markets stumble and price pressures mount, how do crypto assets typically respond?

The relationship isn't always intuitive. Rising inflation can trigger rate concerns, pressuring stocks downward—but simultaneously pushing certain crypto narratives (like digital scarcity plays) into the spotlight. Conversely, a weakening equity market sometimes funnels capital toward alternative assets seeking uncorrelated returns.

Right now, the question hanging over the space is whether crypto continues trading as a risk-on bet with equities, or if inflation erosion creates fresh demand for non-sovereign store-of-value narratives. Tuesday's market action is just one data point, but it reminds us: macro conditions matter for digital asset flows.