Share this article
BTC
$77,272.09
-
0.13%ETH
$1,486.60
+
0.04%USDT
$0.9993
-
0.01%XRP
$1.8335
-
1.70%BNB
$562.08
+
1.90%USDC
$1.0001
+
0.01%SOL
$106.60
+
2.26%TRX
$0.2304
-
0.81%DOGE
$0.1464
+
0.36%ADA
$0.5712
-
0.43%LEO
$9.1552
+
1.65%LINK
$11.37
+
2.70%TON
$3.0148
+
1.53%AVAX
$16.80
+
0.76%XLM
$0.2208
-
2.25%SHIB
$0.0₄1106
+
1.37%SUI
$1.9569
-
1.08%HBAR
$0.1504
-
1.72%OM
$6.3192
+
2.62%BCH
$273.81
-
0.16%Bitcoin Rally Stalls as Increasingly Correlated Gold Drops Below $2K
Bitcoin is increasingly taking cues from gold, a tried-and-tested store of value asset.

Bitcoin's recent price rally has shifted to a sideways meander, possibly taking cues from gold's drop from record highs.
- The cryptocurrency is trading in the general range of $11,600–$11,900 for the fourth straight day.
- Meanwhile, the precious metal is trading near $1,988 at press time – down 4.2% from the record high of $2,075 reached on Friday.
- Both assets have recently developed a relatively strong positive correlation.
- As such, gold's decline may have applied the brakes to bitcoin’s rally from lows near $9,000.

- Gold (above right) rallied from $1,800 to $2,075 in the three weeks to Aug. 7.
- Over the same period, bitcoin rose from $9,100 to a peak of $12,118.
- As a result, the one-month correlation between the two assets has strengthened to a record high of 68.9%, as noted by data source Skew.
- While the growing correlation validates the"store of value" narrative surrounding bitcoin, it also makes the cryptocurrency vulnerable to sell-offs in gold.
- “Gold is feeling the pull of gravity with U.S. Treasury yields showing signs of life," Singapore-based QCP Capital said in its Telegram channel.
- QCP noted that investors should keep a close eye on developments in bond yields and gold because they may have a bearing on bitcoin and ether prices.
- The U.S. 10-year bond yield is hovering near 0.6% at press time, representing a 10 basis point gain from the recent low of 0.5%.
- Gold, which does not provide a yield, may suffer deeper pullbacks and potentially push bitcoin lower if bond yields continue to rise.
- Joel Kruger, a currency strategist at LMAX Digital, believes a potential sell-off in stock markets is a bigger risk to bitcoin's upward trajectory than pullbacks in gold.
- "A turnaround in stocks could threaten bitcoin, given risk for extended stocks to reverse and the potential to see what we saw back in March," Kruger told CoinDesk in a Twitter conversation.
- Global equities could come under pressure if the U.S. Congress remains deadlocked on additional coronavirus stimulus.
Also read: After Falling 65% This Year in Bitcoin Terms, Do ‘Stablecoins’ Need a Rebranding?
Omkar Godbole
Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.
