Bitcoin emerges as the king of assets, growing 10 times faster than gold during the US banking crisis

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Despite Bitcoin (BTC) price volatility, the world’s largest cryptocurrency has outperformed all other assets, including gold. Although it is trading below its psychological milestone of $30,000 to $29,000, Bitcoin is still expected to grow in 2023 as it acts as a haven for investors amid the US banking crisis.

Bitcoin reigns supreme as the best performing asset

Capriole Investment, which provides research and analysis on cryptocurrencies, reported that the current market cycle favors durable assets like gold, as indicated by the 200-week gold-to-equity ratio. This classic indicator highlights when the market favors safe-haven assets like gold over riskier equity assets. Gold and Bitcoin generated some of their best returns during these phases.

As the market continues to favor durable assets, Bitcoin has become the preferred haven for wealth amid the US banking crisis and fiat currency weakness. During this period of high correlation, Bitcoin outperformed gold by 10X in 2023, making it the best performing asset of the year among major asset classes.

Performance of BTC against other major assets. Source: Capriole

The strong positive correlation between Bitcoin and gold has also increased significantly, making them attractive options for investors looking to diversify their portfolios and hedge against economic uncertainty. With unsustainable tightening, banking crises and impending dedollarization, the market is turning to these safe-haven assets to protect its wealth.

BTC correlation with gold. Source: Kaiko

According to Capriole Investment’s report, Bitcoin’s current rally in 2023 would be organic and one-off. The report highlights a key metric showing the total futures open interest as a ratio of the total market capitalization of Bitcoin and USDT.

This metric provides insight into the leverage of the markets and shows that the leverage of the crypto market peaked with FTX Fraud in November 2022. Since then, this ratio has been trending downward in direction unique, despite the Bitcoin price rising over 80% from $16,000 to $30,000. This indicates that there has been little speculation in the market this year.

The report suggests that until this ratio spikes or Bitcoin dominance peaks, the foundations for sustained price appreciation remain in place. This means that the current rally is driven by organic demand rather than speculation, which is a positive sign for the long-term growth of the cryptocurrency market.

Additionally, the report suggests that decreasing leverage indicates a healthy market that is less vulnerable to sudden price drops. This is because a high level of leverage can often lead to market instability, causing sharp price swings and potentially leading to a stock market crash.

The dilemma of BTC between $30,000 and $32,000

According to the report, Bitcoin is trading inside the biggest technical resistance block on the chart since $20,000. This region, which ranges from $30,000 to $32,000, represents the bottom of the 2021 range and the breakout point of the bear market that began in 2022.

Moreover, this is a major weekly order block level and a Fibonacci extension level from the previous cycle. $30,000 is also a major round number level, representing a 50% increase from the 2017 cycle all-time high of $20,000, and $32,000 marks Bitcoin’s 100% appreciation from the low of the low. $16,000 FTX fraud.

BTC key levels. Source: Capriole

Although Bitcoin has shown remarkable resilience in recent months, it is important to note that past performance is not an indicator of future results. However, according to the Caprioles report, if Bitcoin manages to close above $32,000 weekly, it would not be surprising to see a new trend take its price to $40,000.

BTC is trading sideways on the 1-day chart. Source: BTCUSDT on TradingView.com

Featured image from Unsplash, chart from TradingView.com

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