28. Juli 2021

Bitcoin and Gold with Golden Cross – Rally now more than ever?

Bitcoin and Gold with Golden Cross – Rally now more than ever?

The Bitcoin course has again put more than a toe over the $19,000 and recently trained a new golden cross. Meanwhile, the correlation with the stock market and gold price is falling again, although the latter has also printed a golden cross. The market update.

The Bitcoin share price can now, after an eventful start to the week, once again rise well above the 19,000 US dollars. At the time of writing, the industry leader is Ethereum Code trading just above the USD 19,400 mark.

The gentle daily gain of 0.73 per cent represents a 3.4 per cent increase on a weekly basis and a proud 43 per cent in a 30-day comparison. The most recent rise comes a few days after Bitcoin formed a golden cross in the 3-month chart. The Golden Cross describes the fact that the moving average of the last 50 days (MA50) crosses the moving average of the last 200 days (MA200) from below. This often marks an upcoming rally. In the opposite case, there is talk of a death cross, which in turn can indicate a price downturn.

Meanwhile, „digital gold“ is not the only store of value in golden-cross territory. Its analogue counterpart has also formed a fresh golden cross on the three-month chart.

Bitcoin and gold: correlation falls from record level

The correlation between the Bitcoin price and gold, calculated over the last 90 days, has decreased. Data from Blockchaincenter show that the value was still close to 0.6 in mid-November. Now it has slipped to 0.38. A value of 1 would mean that Bitcoin and gold are in lockstep, while a value of -1 is an anti-correlation (one increases as the other decreases). A value of 0, however, would mean that the prices are moving completely independently.

Bitcoin is often credited with being an asset that is decoupled from the classic stock market. The data situation only partially supports this thesis. The fact that the Bitcoin share price is not immune to global panic on the markets was particularly demonstrated by the Corona crash in March. The correlation coefficient between BTC and the Dow Jones jumped from (almost) 0 to over 0.5 within hours. The subsequent rapid recovery in Bitcoin and traditional markets had further manifested itself in the months that followed until July.

The price developments of the last three months have given new impetus to the narrative of Bitcoin as an uncorrelated asset. Currently, the 90-day correlation coefficient is just 0.12. BTC has little concern for the behaviour of the stock markets.