The prices of many precious metals, including gold, have declined recently, with some analysts viewing this trend as bullish for Bitcoin (BTC).
Other factors, such as recent whale accumulation, reinforce the theory that the primary cryptocurrency could be ready to take off soon.
Gold Leads, BTC Follows
The yellow metal experienced a major pump at the start of the year, reaching a new historical peak of around $5,600 in late January. Since then, though, it has declined by roughly 11%, and today (February 17) the price dipped once again below the psychological level of $5,000.
According to some industry participants, there is an interesting correlation between the performance of gold and that of BTC. Earlier this month, X user Merlijn The Trader noted that in recent years, pullbacks in the precious metal have often been followed by an upswing in the cryptocurrency.
“Gold always leads. Bitcoin follows. When gold cools, profits rotate. That’s when capital flows from gold into BTC,” he argued.
Ash Crypto spotted the same parallel. The X user revisited mid-2020, a period when gold went through a sharp correction, and shortly after, the leading digital asset kicked off a bull run.
Other market observers who believe that liquidity rotates into BTC after the precious metal loses momentum include Crypto Fergani and Gargoyle.
The latter presented a pattern in which the cryptocurrency tends to mirror gold’s movements, albeit with its own timing. In their view, both assets pass through three stages: base building, accumulation, and pump. According to the chart, gold has completed these phases, whereas BTC has yet to enter the last one.
More Bullish Factors
Recent actions by large investors, known as whales, support an optimistic outlook for BTC, whose price has declined by almost 30% over the past month. As CryptoPotato recently reported, these market participants remain unfazed by the asset’s negative performance and continue to increase their exposure.
Whales are known as experienced players who may have insider information about forthcoming events. For that reason, some believe that their selling or buying efforts are neither random nor irrational.
Certain indicators and price formations are also worth observing. Bitcoin’s Market Value to Realized Value (MVRV), for instance, has been steadily declining recently and currently stands at approximately 1.25. It compares the current value of all BTC to the price at which people originally paid to acquire their holdings. According to CryptoQuant, ratios below 1 indicate bottoms, while anything above 3.7 signals that the top is in.
Meanwhile, the popular analyst Ali Martinez claimed that the asset might have formed an “Adan & Eve” pattern on its price chart, in which a break above $71,500 could fuel a jump to as high as $79,000.
The post Gold Loses Momentum: Why This Could be Good News for Bitcoin (BTC)? appeared first on CryptoPotato.
