Value

Gold

The price of bitcoin (BTC) has entered a bearish phase, stemming from the asset’s constant decline and range-bound movement. As a result, the largest cryptocurrency has decoupled from gold.
According to CryptoQuant analysts, bitcoin’s price has been <a href="https://t.co/XPaaGrs1Wz" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow">declining</a> while the yellow metal has rallied to new record highs, causing their correlation to turn negative.
<h2 id="bitcoin-decouples-from-gold">Bitcoin Decouples From Gold</h2>
The negative correlation between bitcoin and gold reflects a risk-averse environment where investors prefer traditional safe-haven assets over speculative ones like cryptocurrencies. While BTC is decoupling from the metal, the crypto asset has been <a href="https://cryptopotato.com/2023-aftermath-by-how-much-did-bitcoin-outperform-sp-500-nasdaq-dow-jones-and-gold/" data-wpel-link="internal" rel="noopener noreferrer nofollow">moving</a> in the same direction with lower United States stock markets. Analysts said this is a sign that macro headwinds are affecting BTC.
Since early July, the Nasdaq 100 Composite index has fallen 10%, and BTC has plummeted 16%, with their correlation increasing from -0.85 to 0.39. CryptoQuant repealed that this positive correlation between bitcoin and the Nasdaq index is normal; hence, BTC would be negatively affected by a decline in the stock market.
Bitcoin is also moving in the same direction as the U.S. dollar, which has weakened against other currencies. According to CryptoQuant, a weakening dollar and a declining BTC could indicate broader financial stress or risk aversion when global markets face uncertainty. This causes investors to flee from the USD and riskier assets.
<h2 id="further-correction-incoming">Further Correction Incoming?</h2>
Bitcoin’s descent has caused its valuation metrics to turn bearish. CryptoQuant’s Bull-Bear Market Cycle Indicator entered the bear phase on August 27, when BTC hovered around $62,000. The asset was<a href="https://coinmarketcap.com/currencies/bitcoin/" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow"> worth</a> $57,880 at the time of writing. As the indicator stays in this phase, analysts are not expecting a significant rally, and the market faces risks of further correction.
Moreover, bitcoin’s current condition has been seen on two separate occasions in the past. The asset witnessed 30% corrections in March 2020 and May 2021, while the Bull-Bear Market Cycle Indicator remained in the bear phase.
In addition, bitcoin’s Market Value to Realized Value (MVRV) ratio has been below its 365-day moving average since August 26, signaling a risk of further price correction.
Meanwhile, bitcoin’s bearish signs can be seen in the asset’s long-term holders’ <a href="https://cryptopotato.com/bitcoin-long-term-holders-realized-capitalization-surpasses-10-billion-for-the-first-time/" data-wpel-link="internal" rel="noopener noreferrer nofollow">spending</a> at lower profit margins. This is evidence of a lack of fresh demand for BTC.
The post <a href="https://cryptopotato.com/bitcoins-correlation-with-gold-turns-negative-as-market-slips-into-bear-phase-cryptoquant/" rel="noopener noreferrer nofollow">Bitcoin’s Correlation With Gold Turns Negative as Market Slips Into Bear Phase: CryptoQuant</a> appeared first on <a href="https://cryptopotato.com/" rel="noopener noreferrer nofollow">CryptoPotato</a>.

Bitcoin’s Correlation With Gold Turns Negative as Market Slips Into Bear Phase: CryptoQuant

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