Gold and Bitcoin: Increasing Correlation between the Two Assets

Analysts highlight a positive correlation between BTC and gold. It seems like good news for crypto and precious metal lovers. At the same time, February’s gold futures have fallen while Bitcoin makes it possible to hold its recent gains.

BTC Winter Ends?

The fact that the major cryptocurrency holds its gains and keeps positive makes traders believe that the crypto winter is coming to an end. So, we may expect a bull market to be in the works. After the latest GDP data release with numbers higher than expected, many assets went positive including stocks featuring the US market growth by 2.9% annual rate during the 4th quarter of 2022. All major indices including DJI, NASDAQ, and S&P finished in the green zone.

As for BTC, the cryptocurrency is currently traded between $22,870 and $23,270. Neither bears nor bulls can take control over the price action. Traders are recommended to watch 3 crucial levels to identify potentially profitable price zones:

1. Level 1 to monitor is the support zone that ranges between $19,400 and $20,000. The level will help to clarify direction bias. Everything below this level is garbage. What is above, can make traders bullish taking into account the previous breakdown that took place in summer.
2. Level 2 to watch is the resistance at $23,300. It is the last level close to the older range of $30,000. If the pullback happens, it will result from the top-range failed breakout.
3. Level 3 to consider is the $35,000-$37,000 range low that happened back in 2021. It can be associated with massive counter trend price moves.

Gold Futures Are Declining

Despite the positive correlation between gold and BTC, contracts of gold futures for February have fallen. It is the first decline of 0.68% in 6 last trading days. The metal was traded to its high of $1949.80 before the GDP data release. Later, it was traded at a $1918.40 low.

May the trading luck be with you!