But during COVID-19 that was restrictions and low income earning, we saw gradual increase in investment and appreciation of price so inflation should not be the only reason for price drop.
What appreciation was there?
Once inflation started climbing bitcoin was only going down, every single announcement over CPI triggered another dump, the only time it jumped was when, surprise, the announcement came that inflation has cooled off. No, contrary to what was expected by some, in times of rising inflation BTC did poorly, actually managing a first, that is going below the previous ATH level, and not by a tiny fraction.
And you can see it again now, Silvergate and the FED saying rates will keep going higher and there you have it, 10% in a flash and sub 20k.
No, BTC doesn't thrive in an inflation either, and for sure not in a looming economic recession, it has ceased to overwhelmingly be a safe haven refuge and is more a tradable asset that moves as stocks do.
This is BTC correlation with Nasdaq, almost the entire year it stayed up closer to 1 than to half a point and din;t go blow zero till the very end finally diverging.
