A 4-Month High Bitcoin-Gold Correlation Hints at a Bullish Market Sentiment – Bitcoinist.com

  • The correlation between Bitcoin and its traditional rival Gold reached a four-month high on July 22.
  • At the same time, the cryptocurrency’s correlation with the S&P 500 index plunged to its one-month low.
  • The readings appeared as the US 10-year Treasury real yield sank to a record low last seen in 2012.

The proximity between Bitcoin and Gold is growing as investors look for havens against an underperforming US bonds market.

A report fetched by Skew, an on-chain analysis platform, shows that Gold’s one-month realized correlation with Bitcoin spiked to its four-month peak on July 22. At 40.4 percent, the mutuality between the two assets almost recovered wholly from its April 27 bottom of minus 42.8 percent.

Bitcoin’s shift towards gold also coincided with its withdrawal from the S&P 500. The one-month realized correlation between the cryptocurrency and the S&P 500 fell to 42 percent two weeks after peaking at a record high level. It is now near its one-month low.

How To Get Free Crypto  

Bitcoin, Gold Price Behaviors

Bitcoin and Gold prices have risen sharply this week. The cryptocurrency, which was stuck below $9,300 for two consecutive weekly sessions, broke above $9,500. Meanwhile, the precious metal topped at $1,870 an ounce for the first time since September  2011.

America’s equity indexes also fared well, trading now above their pandemic-induced March 2020 lows.

The rally in the benchmark S&P 500 appeared despite a rising number of COVID cases, as well as escalating tensions between China and the US. But the rise of Gold and Bitcoin alongside showed that risk-on investors are uncertain about a V-shaped recovery.

Economist Stephen Roach further warned that the US market could be in for a “dreaded double-dip” scenario.

“This behavioral capitulation on the demand side of the U.S. economy is going to continue to create a lot of problems for businesses, business hirings, [and] potential corporate bankruptcies in the second half of this year,” the former Morgan Stanley Asia chairman told CNBC.

The ‘TINA’ Factor

Bitcoin and gold also reached parity as the US real yields tumbled against the signs of continued Federal Reserve support.

The 10-year Treasury real yield – adjusted for inflation – fell to around minus 0.9 percent, its lowest level since 2012. It was well above the zero-mark earlier this year, but the Fed’s relentless bond purchasing programs, supported by a near-zero lending rate, crushed the bond market.

Coinbase Banner  

Lower yields on the US bonds involuntarily helped to spur bids in stocks, bitcoin, and gold markets. Economists call it the TINA factor – investors moving into riskier assets when “There Is No Alternative.”

That partially explains why Gold’s correlation with Bitcoin grew higher this week.

Meanwhile, TD Securities see the real yields declining towards minus 1.5 percent as the Fed expands its Treasury debt purchases. That further raises the possibility of Bitcoin continuing its uptrend further into the third quarter.

Go to Source
Author: Yashu Gola

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.