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Since the price of Bitcoin reaches the new ATH before the end of November 2020, this is an ideal time to check the correlation between Bitcoin and gold and the impact on the price.
According to skew’s data, Bitcoin and gold were decoupled in early November 2020. Bitcoin posted quarterly earnings of 72% and monthly earnings of 35%. So far, in mid-2020, the annual return of gold is 15%.
In the process of promoting Bitcoin’s new ATH, on-chain analysts predict that Bitcoin may be decoupled from gold.
A week ago, the price of Bitcoin exceeded $19,000 for the first time since 2017, and broke $19,861 on multiple exchanges (ATH on Coinbase). However, the opposite is that the price of gold has fallen, thus showing that Bitcoin and gold are not always related.
Although 2020 is not the best year for gold prices, the price of Bitcoin has soared by more than 100% since June. The demand for spot and derivatives exchanges created by institutional investors keeps the momentum of the Bitcoin network high.
Willy Woo’s Bitcoin network momentum graph shows that this momentum has continued since early 2020. Although gold is suffering from low prices, Bitcoin has been used as a store of value, replacing digital gold.
The well-known Twitter blogger Dav the Wave recently tweeted that “what is happening is that Bitcoin is gradually being adopted, not just as a means of payment, but as a store of value.”
According to Dav the wave, what is happening is that Bitcoin is being monetized or capitalized, and most analysts will agree after reading the chart.
For retail traders who use this icon to predict price trends, the basic principle is that since 2014, the price trend chart is more or less logarithmic, and pragmatic investors looking for basic principles can see Bitcoin’s Quarterly earnings.
Another beneficial result of this decoupling is that Bitcoin can get rid of its correlation with gold, otherwise it will mean further corrections. Of course, since gold has gone through the same situation and Bitcoin has decoupled from gold, the price of Bitcoin has reached the new ATH.