Bitcoin May Still Break $50K If Gold Correlation Continues — Chart
Bitcoin (BTC) could be sucked towards $50,000 like a magnet if it continues to follow gold, fresh analysis predicts.
In a Twitter update on January 26, popular trader and market commentator TechDev wrote presented a high new BTC price target linked to XAU/USD.
Gold, Bitcoin Inverse Dollar Correlation ‘No Doubt’
As the debate over how much Bitcoin will compete with gold remains, bullish price ceilings are emerging.
For TechDev, the outlook is more optimistic than for many – Bitcoin may even crack the $50,000 mark.
“What if Bitcoin Continues to Follow Gold/DXY?” he asked.
An accompanying chart compared BTC/USD to gold versus the US Dollar Index (DXY). The precious metal, TechDev suggested while continuing an earlier narrative, may be ahead of Bitcoin in terms of mining.
As Cointelegraph reported, the correlation between gold and Bitcoin is now practically 100%.
“Beyond momentary reactions to geopolitical events… Do you think gold has led bitcoin for 4 years?” a previous Twitter thread asked.
TechDev added that the idea was “not a forecast. A legitimate question.”
“Would be interesting if it plays out. The inverse correlation of both assets to the dollar is beyond doubt,” he concluded.
Should Bitcoin continue 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%, per data from Cointelegraph Markets Pro and TradingView.
According to TechDev, Bitcoin now has a chance to pass not only $30,000, but even $50,000.
Analyst: Gold is poised for an imminent large trade increase
Even gold bugs, traditionally far from Bitcoin’s allies, are eyeing a new halcyon era for the metal’s own fortunes.
Related: Bitcoin Faces ‘Significant Danger’ From Fed in 2023 – Lyn Alden
Alasdair Macleod, head of research at Goldmoney, this week brought geopolitics to the fore in his forecast, predicting a big increase in gold-based trading in Russia, China and across Asia.
“Russia will not make formal announcements on gold standards, because there is no need. Neither will China: Instead, it may reveal an increase in gold reserves,” said a Goldmoney article published on January 26.
Macleod himself is no fan of Bitcoin, with a dedicated article comparing it to gold as money from December, flatly predicting that the latter would win out in a crisis.
“In order to confirm its status as money, bitcoin will have to follow the laws of time preference. In other words, its current relationship with interest rates will have to change so that rising interest rates that reflect fiat currencies’ loss of purchasing power should be reflected in rising values for bitcoin,” he wrote.
“We will not try to guess this future. But we can say with certainty that if the deterioration of currencies accelerates, gold’s relative value will increase accordingly, while that of bitcoin may not.”
Other popular commentators have been more complimentary, with Mike McGlone, senior macro strategist at Bloomberg Intelligence, often entertaining Bitcoin outperforming gold over the long term.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
