U.Today – Bloomberg Intelligence Strategist Mike McGlone recently highlighted an intriguing trend that could have significant implications for the cryptocurrency market, particularly as it relates to the relationship between gold and the S&P 500.
In a recent analysis, McGlone highlighted the decline of the Bitcoin/gold cross, particularly for the S&P 500, and its broader implications for risk assets. The analysis also reflects Bitcoin's rally after the SEC's approval of Bitcoin spot ETFs.
According to McGlone, the US ETF launch in January boosted inflows, strengthening Bitcoin's status as a leading indicator. It was a near-perfect storm, as Bitcoin hit all-time highs in the first quarter, but failed to hit new all-time highs against gold and the S&P 500, and failed to surpass peaks set in 2021.
Since capital inflows into Bitcoin ETFs have relatively slowed, the hangover may have implications for risk assets, including cryptocurrencies.
McGlone explained that Bitcoin was rising against gold the last time the S&P 500 e-mini future surpassed its 50-week moving average in November, but now the Bitcoin/gold cross is falling.
The decline of the Bitcoin/gold cross, in contrast to the performance of the S&P 500, could indicate a possible reversal in risk assets that could have far-reaching consequences.
Bitcoin price action
In late April, Bitcoin experienced its halving event, which has historically been a selling news event in the immediate term. The fourth halving was no exception, with the price of Bitcoin falling shortly after and trading near $57,000. This is the lowest price in the last two months and the market has remained stable since the halving date.
Remove ads
.
Measured from the all-time high of $73,000 reached in mid-March, Bitcoin prices fell almost 20%, which is the deepest correction in terms of close since the FTX lows in November 2022. However, Glassnode deduces that This macro bull trend could be one of the most resilient in history, with comparatively shallow corrections so far.
This article was originally published on U.Today.
