Bitcoin may still break $50,000 if correlation to gold continues Chart

[ad_1]

Bitcoin (BTC) could be drawn towards $50,000 like a magnet if it continues to follow gold, according to new analysis.

In a January 26 Twitter update, popular trader and market commentator TechDev outlined a new high BTC price target tied to XAU/USD.

Gold, Bitcoin Dollar Inverse Correlation Without a Doubt

As the debate over competition between Bitcoin and gold lingers, bullish price holds are surfacing.

For TechDev, the outlook is more optimistic than for many, Bitcoin could even cross the $50,000 mark.

What if Bitcoin continued to follow Gold/DXY? he asked.

An attached chart compared BTC/USD to Gold versus the US Dollar Index (DXY). The precious metal, TechDev hinted while continuing a previous narrative, could lead Bitcoin in terms of recovery.

Annotated chart BTC/USD against XAU/DXY. Source: TechDev/Twitter

As Cointelegraph reported, the correlation between gold and Bitcoin is now virtually 100%.

Aside from momentary reactions to geopolitical events… Do you think gold has been leading bitcoin for 4 years? a previous Twitter thread asked.

TechDev added that the idea was not a prediction. A legitimate question.

It would be interesting if it plays out. The inverse correlation of the two assets with the dollar is indisputable, he concluded.

If Bitcoin continues to chase gold in relative terms, the outcome could be a game-changer for bulls. XAU/USD is up 6.1% year-to-date, already well below BTC/USD by 39%, according to data from Cointelegraph Markets Pro and TradingView.

According to TechDev, Bitcoin now has a chance to top not just $30,000, but even $50,000.

BTC/USD 1 hour candle chart (Bitstamp). Source: TradingViewAnalyst: Gold is poised for a huge impending trade impulse

Even gold bugs, traditionally far from Bitcoin allies, are eyeing a new halcyon era for the metals’ fortunes.

Related:Bitcoin faces considerable danger from the Fed in 2023 Lyn Alden

Alasdair Macleod, head of research at Goldmoney, put geopolitics front and center in his forecast this week, predicting a major increase in gold trading in Russia, China and across Asia.

Russia will not make official announcements on gold standards, as it is not necessary. Neither does China: instead, it could reveal an increase in gold reserves, reads a Goldmoney article published on January 26.

Macleod himself is not a fan of Bitcoin, with a dedicated article comparing it to gold as December’s currency emphatically predicting that the latter would gain in a crisis.

To assert its status as a currency, bitcoin will have to obey the laws of time preference. In other words, its current relationship with interest rates must change, such that rising interest rates reflecting the loss of purchasing power of fiat currencies are reflected in rising bitcoin values, a he wrote.

We will not try to guess this future. But we can confidently say that if currency depreciation accelerates, gold’s relative value will rise accordingly, unlike bitcoin’s.

Other popular commentators were more complimentary, with Mike McGlone, senior macro strategist at Bloomberg Intelligence, entertaining Bitcoin frequently outpacing gold in the long run.

XAU/USD 1-day candle chart. Source: Trading View

The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

[ad_2]