In 2024, both Bitcoin (BTC) and gold have experienced remarkable growth, emerging as the year’s top-performing assets. However, recent trends indicate a shift in investor preference toward gold as a safe-haven asset amid escalating economic uncertainties, with Bitcoin lagging behind.
A new report from CryptoQuant highlights a growing negative correlation between Bitcoin and gold. As gold surged to a record high above $2,500 per ounce, Bitcoin has seen a significant decline, down over 22% from its peak of more than $73,000 reached in March.
In contrast to gold’s ascent, U.S. stock markets have faced challenges, with the S&P 500 dropping 3.6% since August 30. Analysts at CryptoQuant describe Bitcoin’s current valuation as bearish, noting that their Bull-Bear Market Cycle Indicator has been in a bearish phase since August 27, when Bitcoin was priced at $62,000. This bearish trend suggests that a substantial rally for Bitcoin is unlikely in the near term.
The MVRV (market-value-to-realized-value) ratio, an indicator of Bitcoin’s valuation relative to its fair value, has remained below its 365-day moving average since August 26. This trend has historically signaled potential price corrections, reminiscent of significant declines observed in May and November 2021.
Additionally, Bitcoin long-term holders (LTHs) are spending at lower profit margins, with the LTH SOPR ribbons—moving averages of varying lengths—trending downward since late July. This suggests a lack of fresh demand for Bitcoin.
As a result of diminishing demand, Bitcoin has decoupled from gold, with Bitcoin prices declining while gold continues to reach new highs. This negative correlation indicates a risk-averse environment where investors are gravitating toward traditional safe-haven assets like gold, with Bitcoin reflecting the broader downward trend in stock markets.
Julio Moreno also noted that Bitcoin is behaving more like the Nasdaq rather than gold, highlighting its role as a risk asset.
However, there may be potential for Bitcoin to recover. Market analyst Bitcoin Trapper has observed that Bitcoin’s 3-month chart closely resembles gold’s 3-month chart from 1976, just before gold’s significant rally. Furthermore, Charting Guy has identified a Bitcoin/gold fractal that has accurately predicted Bitcoin’s price movements for the past 1,000 days, suggesting that BTC may begin to trend upward after October.
As of the latest update, Bitcoin is trading at $57,887, up 0.42% for the day, while spot gold is priced at $2,511.80 per ounce, down 0.17% in the session.
