Bitcoin’s multi-month consolidation phase has caused its correlation with other assets to degrade, leaving investors to question where it might trend next.
One analyst is now floating the possibility that the cryptocurrency’s price is currently lagging just behind that of gold.
He points to a potential accumulation pattern that could confirm this notion, as well as a strikingly similar volume trend seen between the two assets.
Data shows that the BTC and gold still remain largely decoupled, however, with their correlation degrading in recent weeks.
The same data also indicates that this correlation is showing signs of growing again, which could bolster the case that Bitcoin’s price action is lagging that of the precious metal.
If this is the case, then the benchmark digital asset could be well-positioned to see some intense upwards momentum in the coming few weeks that allows it to surge past its yearly highs of $10,500.
Bitcoin Shows Signs of Trailing Gold’s Price Action
Bitcoin has been caught within an unrelenting bout of sideways trading over the past couple of months.
Buyers and sellers have reached a clear impasse as it struggles to break below $9,000 or above $10,000.
These levels have been broken on a few occasions, but each time has been incredibly fleeting. Over the past week, this trading range narrowed to between $9,000 and $9,300.
BTC has since been able to break out of this range, currently trading up marginally at its current price of $9,400.
One bullish possibility that analysts are considering is that BTC is caught in a bullish accumulation pattern similar to that which gold saw just before its latest push higher.
There does appear to be a convincing case to be made for this possibility.
One analyst recently put forth a chart showing Bitcoin price action and that of gold, musing the possibility that Bitcoin is lagging behind the commodity.
His chart shows that the crypto appears to be caught within an accumulation pattern that is strikingly similar to the one gold saw several weeks ago. The two assets’ volume trends also seem to align.
Image Courtesy of Bitcoin Jack. Charts via TradingView.
Here’s What Data Says About the Correlation Between the Two Assets
While overlaying Bitcoin and Gold’s recent price action, there is a clear divergence in their correlation over the past few weeks.
This is seen while looking towards the below chart from analytics platform Skew:
Image Courtesy of Skew.
This doesn’t mean that BTC isn’t lagging behind gold’s price action, however, and could even bolster this theory.
Data regarding the two assets’ realized correlation indicates that they are beginning to show signs of re-coupling with one another following an extended period of independent trading.
Image Courtesy of Skew.
Featured image from Shutterstock. Charts from TradingView, Skew.