This week's Bitcoin price exploded through the firming consolidation range and broke with $ 10,000 resistance in one day and reached $ 11,400. Breakout broke a new record instead of being locked and stepping in stocks because the gold crypto asset was late.
Comparison charts show that the market value and leading cryptocurrency may have pulled its relationship with the S&P 500 in favor of the rising precious metal. In this case, the entire crypto space will benefit – that's why.
Bitcoin Changes Correlation Between S&P 500 and Gold
Gold has set an all-time high this week, just ahead of the US government, detailing details of its recent efforts to boost the economy.
As a result, the dollar dumping sent safe haven assets such as precious metals as more money was poured into the already flooded market.
The latest incentive round adds another $ 1 trillion to the Fed's balance sheet, allowing investors to flock to assets that could pose a risk to expected inflation. Bitcoin has recently been named "the fastest horse in the race against inflation" by billionaire hedge fund manager Paul Tudor Jones.
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In this recent shake in the dollar, Bitcoin also benefited, not just gold money. In fact, Bitcoin followed more closely than the stock market to the ongoing edition of gold's money supply.
The leading cryptocurrency with its market value has been associated with the S & P500 in one word since Black Thursday. But when the dollar collapsed this week, the correlation seems to have ended.
BTCUSD / SPX / XAUUSD Correlation Comparison Chart | Source: TradingView
How Will Crypto Market Benefit From Precious Metals?
The stock market correlation caused the Bitcoin and the rest of the crypto market to collapse in mid-March, just as assets broke off from bear market resistance. FUD related to Pandemic proved to be too much for any entity.
Stocks, crypto and even precious metals have collapsed. All markets recovered sharply, but none performed as well as gold. And as of last week, Bitcoin.
The relationship of the crypto asset with the stock market has kept Bitcoin back a few weeks. It also acted as an ominous black cloud hanging over the industry, where a second leg-down scenario in stocks could lead to a lower drop in crypto.
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Gold shines very brightly, and the cryptocurrency, which shares a lot of similarity with precious metal, can finally help traders go through the storm and realize the potential of the asset.
It is no longer faced with the risk of drifting down by stocks in another major fall scenario, but it is another way for the larger crypto market to take advantage of the return to anti-correlation with stocks.
XAGUSD / Altcoin Market Cap Correlation Comparison Chart | Source: TradingView
Only BTC's suddenly more closely related to gold, altcoins and silver shows a surprisingly similar graphic pattern. Can Altcoins prove Bitcoin's silver equivalent as digital gold?
The more these crypto assets join the safe haven negotiation with precious metals, the narratives for the next bull market may be under our noses.