Gold and Bitcoin trading eerily in sync
In the past many traders and market analysts have looked to outside markets in order to get a better sense for the commodity or index they are involved in. One example of this is forecasting future moves in gold by observing movement in equities, crude oil or treasury yields in order to gauge the influx or outflow of capital in the precious metal. Recently however an unconventional synergy has come to our attention, since the start of 2020 Bitcoin has been acting as a dance partner in a salsa class. Only in minute ways does BTC vary from recent action in gold futures.
Another interesting correlation between the two assets is how both had just recently broken out of long standing formations easily discernable on daily candlestick charts. Both had broken out of their prospective pennant formations. They both had multiple false breakouts to both sides before finally the two had a clear move that resulted in a close above the upper trend line of their compression triangles. Eerily while the bottoms occurred a few days apart in mid-March, the recent breakouts happened precisely on May 14th. For both of these unrelated and indifferent commodities they also happened to bottom within two days of each other hitting their lows for 2020 at the same time. As it looks the two completely different assets are coming closer to traveling a synchronized orbit around Market psyche and sentiment.