Correlation of bitcoin and gold prices rose sharply

Back in the middle, the similarity in bitcoin and gold price behavior was nearly zero.
By now, the correlation of bitcoin and gold prices over the last 40 days has reached a significant value of 0.5, which is a strong increase after it was almost zero in mid-August.
This situation is seen against the backdrop of how bitcoin’s volatility has been less than that of the S&P 500 and Dow Jones over the same period. Accordingly, the price of bitcoin began to fluctuate less following changes in these two main indicators of the “pulse” of the world’s largest country capital market – the U.S.
Bank of America said in a letter to investors that “the decrease in bitcoin’s positive correlation with the S&P 500 and the rapidly increasing correlation with gold indicate that investors may be looking at bitcoin as a relative safe haven in a situation where global macroeconomic uncertainty remains and market “bottoms” may eventually be fixed.
Recall that Bank of America, speaking of the “bottom” of the market, refers primarily to the possibility of a renewed rally in the S&P 500. However some experts from other banks believe that such a rally might turn out to be short-lived and the stock market in New York might then test a new “bottom”.
In the bitcoin market, there may well be a scenario indicating record low volatility and a number of others moments, indicating a higher probability of Bitcoin’s price start to rise. In this case, large investors will wait for another drawdown in the price of the cryptocurrency No. 1 to increase the purchase of this asset, and after that there may be a real and sustained rally in bitcoin.
The high correlation of bitcoin and gold prices is another reason to keep a close eye on how the gold price will further develop, which, as in the case of bitcoin, has fallen markedly since the beginning of the year, by 9.7% and 57.7% respectively.

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