Bitcoin price is looking to leap key resistance alongside gold has jumped to a nine-year high
Gold stalled out for a time yesterday at the 2013 high of $ 1.796 but broke through that and the $ 1.801 barrier today. The bid just keeps coming now as it hits a fresh high at $1807, up to $ 12 on the day. Bitcoin price, meanwhile, is looking to overcome its key resistance.
Bitcoin price looking to leap key resistance alongside a strong rally in gold
At press time, Bitcoin price is hovering around $ 9,431 – close to the resistance of a trendline connecting June 1 and 22 highs. A sustained move past $ 9,330 would indicate an end of the bearish trend from the June 1 high of $ 10,429.
While Bitcoin is still struggling, gold has risen to a nine-year high of $ 1,801 per ounce. Currently, gold was only 6% short of the previous high of $ 1,920 in September 2011. As noted by popular macro analyst Holger Holger Zschaepitz, gold is likely to attract bids due to real yields (inflation adjustment issued) by U.S. bonds.
Comparison of gold and U.S. 10-year real yield (inverse) | Source: Bloomberg
As seen above, real productivity has decreased from 0.3% to -0.73% in the last 3.5 months. In the same period, gold has risen from $ 1,450 to $ 1,800. Basically, gold is acting as an inflation barrier.
Bitcoin also rose from $ 3,867 to $ 10,400 in the two months before the Bitcoin halving event on May 11. However, the rally stalled, and Bitcoin failed several times to gain a foothold above $ 10,000. More importantly, Bitcoin’s correlation with the S&P 500 has been strengthened, increasing its appeal as a safe-haven asset.
However, many analysts remain optimistic about Bitcoin’s long-term prospects. In the BTC market, there is institutional acceptance and increased awareness of the asset class, which will signal a good long-term price increase.
Even so, Bitcoin’s volatility was much lower than traditional gold assets during the crisis. Even so, there is nothing traditional about equity markets and the traditional economy today.
Stephen Stonberg, COO and CFO at Bittrex Global, stated:
“In this new normal, Bitcoin starts to look appealing as a new asset class that is not subject to the constraints and money printing of central banks.”
The U.S. Federal Reserve has expanded its balance sheet more than 3 trillion dollars since the beginning of the coronavirus crisis in early March. However, unprecedented money printing and inflation concerns have mainly benefited gold. It is still to be seen if Bitcoin takes its expected role as a long-term inflation barrier.
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