Gold breaking down against Bitcoin is highly bullish for BTC — Analyst

Sunday 25 October 2020, 10:54 AM AEST - 1 month ago

Earlier this week, Bitcoin (BTC) advocate and Real Vision CEO Raoul Pal said gold is breaking down against BTC. If the dominant cryptocurrency continues to gain momentum against BTC, it could strengthen its perception as a store of value.

In the past month, the price of Bitcoin gained 30.36% against the U.S. dollar, from $10,136 to $13,217. In the same period, gold has gained about 2.25%, from $1,863 to $1,903.

Gold slumps against Bitcoin. Source: Raoul Pal, BloombergWhy is Bitcoin outperforming gold and stocks?

In the past two weeks, while the price of Bitcoin rallied strongly, both gold and the U.S. stock market steadily recovered.

The confluence of three major factors likely contributed to the upsurge of Bitcoin since early October.

First, PayPal's crypto integration announcement buoyed market sentiment. Second, the institutional demand for BTC has continuously increased following Square, MicroStrategy, and Stone Ridges investment. Third, Bitcoins favorable high time frame log charts have spurred significant optimism.

Particularly, after its breakout above $12,000, the volume of Bitcoin across the spot, institutional, and derivatives market spiked. Consequently, the digital asset began to outperform most risk-on and risk-off assets. Pal said:

Gold is breaking down versus bitcoin, as expected cc: @michael_saylor Everyone take note. The next thing I'm expecting is the correlations between BTC and the dollar and BTC vs equities to break down too... let's see. #Bitcoin.

As Cointelegraph reported, when Bitcoin surged past the $12,000 resistance level, it marked a clean breakout on the weekly chart. Traders have started to pinpoint the weekly and monthly log charts to predict a new all-time high.

The strong technical momentum of Bitcoin and its decoupling from gold and stocks are also possibly furthering the intensity of BTCs current rally.

In the short term, cryptocurrency technical analysts say that Bitcoin faces ...

Read full story on Cointelegraph

Disclaimer: The content and views expressed in the articles are those of the original authors own and are not necessarily the views of Crypto News. We do actively check all our content for accuracy to help protect our readers. This article content and links to external third-parties is included for information and entertainment purposes. It is not financial advice. Please do your own research before participating.