What’s next for Bitcoin and Gold’s correlation?
When Bitcoin decoupled from Gold in November 2020, on-chain analysts predicted that it was gearing up to hit a new ATH on the charts. As it happened, that’s exactly what happened. However, the sentiment on the part of the market’s retail traders was mostly mixed after the Bitcoin-Gold correlation dropped so dramatically.
The “store of value” narrative led to the pre-bull run market rally in mid-2020, and the present price rally was a result of Bitcoin emerging as a store of value, not exactly digital cash. That is why its correlation with gold was so critical. Now, since both assets are rallying, it is obvious to draw parallels between the two. The next step is to analyze the rallies and find a point of shared commonality.
For gold, its biggest-ever 3-week liquidation event happened this year, with all the weak hands in the market cleaned out. In fact, nearly $25 billion went into EM equity, while much more than that went into US equity. All said and done, nearly $8 billion was pulled out of gold.
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