How Reduced Gold Momentum Could Spur Bitcoin Price To New Highs
A decline in the gold price rally could fuel Bitcoin (BTC) to new highs this year. Data from previous years shows that a pullback in inflows to the precious metal leads to the opposite in Bitcoin. Both assets remain valuable to investors, with each described as a store of value and a hedge against inflation. Crypto enthusiasts are optimistic for more market growth, citing macroeconomic factors.
The Relationship Between Gold and Bitcoin Price
Price charts show Bitcoin soaring to new highs when theres a loss of momentum in the yellow metal. This has left many drawing comparisons with current market dynamics. In 2019, gold prices increased from $1,450 to $2,000 by August 2020. This uptick in gold prices was driven by central bank stimulus during the lockdowns.
The asset tapped a new all-time high in 2020 before a slight correction, which marked the beginning of massive inflows to Bitcoin. Before this phase, BTC prices traded sideways before inflows pushed them to new highs. The crypto market leader moved from $20,000 to $63,000 in 2021, characterized by heightened institutional investment in digital assets.
Meanwhile, the gold and Bitcoin debate made rounds at the time, with BTC dubbed the digital gold. Upticks in the last decade dubbed the asset a store of value against global inflation. In several countries, crypto became an avenue to preserve wealth after a sharp drop in economic conditions. On the other hand, gold enthusiasts said that precious metal was a safer asset and would receive sustained growth because central banks and institutions backed it.
Impact on Present Market Conditions
Gold has tapped a new high above $2,700, a 37% growth this year, with other metals moving in the same direction. Per Bolds report, in the last seven days, golds rise was fueled by its institutional inflows and ETFs tapping record inflows since October 2022.
With this rally, Bitcoin is set to gain momentum with a slight correction in gold, as seen in historical charts. According to crypto users on social media, Bitcoin could move closer to levels it attained earlier in the year after the approval of spot ETFs. BTC ETFs inflow spiked when the asset moved past the previous resistance level.
Read more: https://zycrypto.com/how-reduced-gold-momentum-can-spur-bitcoin-price-to-new-highs/
Text source: ZyCrypto
