U.Today – Veteran trader Peter Brandt has recently shared his thoughts on the Bitcoin/Gold ratio, implying that a tradable local bottom may be on the horizon.
In a recent tweet, Brandt provided an analysis of the Bitcoin/Gold ratio, which compares the price of gold to that of gold. This ratio is a key indicator for traders looking to understand the relative strength of Bitcoin against the traditional safe haven asset, gold. Brandt accompanied the tweet with a chart showing a parallel channel-like pattern, with Bitcoin trending lower against gold.
A parallel channel is a technical pattern used to define price movements between two trend lines: one acting as resistance (the upper line) and the other as support (the lower line). In the case of the relationship, the trend depicted resembles that of a descending channel, which is commonly used to predict general changes in trends.
This technical pattern suggests that the Bitcoin Gold ratio is experiencing a downtrend, but it also indicates that it could soon reach a support level where a reversal could occur.
Bitcoin decouples from gold
According to a recent analysis by CryptoQuant, Bitcoin has decoupled from gold and its prices have fallen as gold hits all-time highs.
Bitcoin prices have fallen while gold prices have hit a new record, resulting in a negative correlation between the two.
A period of negative correlation between Bitcoin and gold, with gold rising and Bitcoin falling, typically indicates a risk-averse environment where investors choose traditional safe-haven assets like gold over speculative assets like Bitcoin.
At the time of writing, BTC was up 3.17% over the past 24 hours to $59,773. The price of Bitcoin surged over the weekend and hit its highest level since early September as traders grew more confident that the upcoming Federal Reserve meeting could result in a large-sized rate cut.
This article was originally published on U.Today
