The price of Bitcoin (BTC) has been showing a weak trend lately, and many attribute this to the tight correlation of crypto money with the stock market. The reason for this is shown as the price movement of the cryptocurrency is more related to the sub-capital compared to stock indices.
On the other hand, the trend of gold in the next stage can also provide important information about Bitcoin’s future price movements. An analyst states that he believes that gold can now create a clear distribution model, and that a breakout may take place now.
The rejection of the current prices and the start of the decline, however, is seen as a strong possibility that it will suffer great losses due to the confirmation of the incredibly decreasing technical pattern. As this global economic turbulence increases, this scenario can be scary for Bitcoin as its open correlation with gold will continue.
The recent interest in Bitcoin and gold is not surprising. Both assets are seen as preferred assets to avoid the effects of inflation and economic turbulence in difficult times. Although one of the two assets is digital and one is physical, there are some basic similarities due to their limited supply.
Although Bitcoin is permanently limited to 21 million, it seems quite difficult for now to see gold as a safe haven for a long time and to prevent interest in gold naturally.
Investors are also aware of these similarities between Bitcoin and gold. Because especially recently, both assets have been showing similar price movements.
This strong correlation between bitcoin and gold may have a negative effect for Bitcoin in the future. A popular analyst said in a statement that gold has recently established a clear distribution pattern, which means that it will see a big drop soon. He also added that this expected drop could become permanent if the US dollar appreciates.