It is becoming more and more certain by the day that Bitcoin looks like a safe haven, it currently plays the role of a fixed asset, and this is evidenced by the striking correlation between the cryptocurrency, gold, silver and other traditional “safe havens”.
Some believe that the current correlation between cryptocurrency and gold came about as a result of the currency's previous relationship with the stock market, which may eventually herald the incredibly good performance of the standard cryptocurrency despite the current strength of the stock market.
Regardless of the link to the cryptocurrency XM Arabia Whether the stock markets or gold are performing, the notion that cryptocurrency is linked to any traditional asset proves to be a trustworthy asset, and one analyst explained that the current bullish trend is likely to provide a boost to the price of Bitcoin in the coming days, weeks, and even months.
The price of gold soared above $2,000 an ounce to all-time highs, at the same time, and from a technical perspective, analysts point out that the cryptocurrency looks incredibly strong, this means that it may only be a matter of time before Bitcoin looks back up. Their all-time levels are at $20,000.
On the other hand, experts believe that the link between bitcoin and gold may be short-term, and the increasing demand for buying gold and bitcoin raises fears that the current growth wave may be misleading, citing the historical growth of stocks amid the Corona virus epidemic, which raises fears of sudden collapses, as happened last March.
Bitcoin acts as a hedge
Bitcoin is trading in the $11,600 level, and over the past two weeks the cryptocurrency has been in an upward curve from the bottom of its $9,000 levels.
Bitcoin has stabilized around the $9,000 support level over the course of more than two months, and has been far from all sorts of bullish trends that previously allowed the coin to make high gains at the end of 2017 and mid-2019.
But the current uptrend indicates more vibrant and sustainable growth than we witnessed previously, and may also signal that Bitcoin is trying to build a solid foundation for its next parabolic move.
One factor that may also underpin Bitcoin's next big move to the upside is its growing status as a fixed asset, especially as the cryptocurrency has formed an increased correlation with gold in recent weeks as its correlation with the stock market has deteriorated.
The recent movements in bitcoin correlations show that investors are viewing it as an inflation hedge which is a very positive development, as bitcoin no longer simply acts as a high-risk asset.
Positive outlook for bitcoin
As gold is currently one of the top performing assets, its increasing correlation with Bitcoin is likely to provide an upward support factor, and it will be on the verge of becoming digital gold due to the inherently similar asset attributes such as limited supply and low growth rate.
If this relationship continues in the future, the bitcoin price may rise to $18,000, for this possible upward trend in the spot gold price towards $3,000 an ounce.
Analysts predict that Bitcoin will continue its slight upward trend in the near term, and despite expectations of a small rally, a move towards fresh annual highs at $12,500 is imminent.
- US Dollar largely erases 2024 gains amid expectation of federal rate cuts. - 17 September, 2024
- Rare currency pairs in the Forex market - May 26, 2023
- Key tips for traders in Forex Market - April 20, 2023
