As Bitcoin surpassed $65,000 during the day, CryptoQuant CEO Ki Young Ju offered new insights regarding BTC.
At this point, Ki Young Ju stated that the relationship between Bitcoin and gold has begun to strengthen again. According to Ju, the relationship between BTC and gold has returned to the levels seen during the period when Bitcoin was considered ‘digital gold’.
Is Bitcoin Returning to the Era of “Digital Gold”?
CryptoQuant CEO X published a chart from their account showing the 90-day Pearson correlation coefficient between Bitcoin and gold. According to the shared CryptoQuant data, the correlation quickly recovered and rose above 0.6.
A correlation coefficient close to 1 between gold and Bitcoin indicates a stronger tendency for the price movements of the two assets to move in the same direction, while values below 0 indicate that they are moving in opposite directions.
At this point, according to the chart, the correlation between Bitcoin and gold remained generally in a positive range until last year, but showed a sharp decline from the end of last year, falling to approximately -0.8 at the beginning of this year. This has caused the movements of the two assets to diverge significantly.
Because while the price of gold was rising during that period, Bitcoin showed a different trend and experienced a decline.
According to the renowned CEO’s post, the correlation coefficient between the two assets has recently recovered rapidly, returning to positive territory. This means that Bitcoin and gold have recently shown a strong tendency to move in the same direction again. Furthermore, Ju’s recent assessment suggests that with the renewed strengthening of the price relationship between Bitcoin and gold, the “digital gold” narrative for BTC may resurface.
A Short-Term Peak May Form in Bitcoin!
Crypto analytics company CryptoQuant, in its latest report, assessed that Bitcoin could continue its upward trend in the short term, forming a peak, before experiencing a deeper decline.
According to CryptoQuant analysts, in their analysis based on Elliott Wave theory, BTC is approaching a short-term peak in the $66,317-$68,965 range and may then face a deeper decline.
Analysts noted that the downward “i~v” wave pattern, which represents the five sub-waves used in Elliott Wave analysis, indicates that a broader bear market trend is still strong.
In this context, analysts suggest that the current recovery in Bitcoin could be part of a downward movement within a bear market structure. According to analysts, if the expected peak is reached, the final “V” wave could begin, and a new wave of selling could be seen in BTC.
They also added that on-chain indicators support the downside risk.
CryptoQuant analysts also noted that although Bitcoin is forming higher peaks, the MACD indicator is showing a bearish trend. The RSI has also moved into the overbought region.
This indicates that while the price is rising, the momentum is not strengthening to the same extent.
Analysts also added that the next major target they are watching in a downward scenario is $51,336.
