In a recent tweet, Brandt provided an analysis of the Bitcoin/Gold ratio, which compares the price of Bitcoin to Gold. This ratio is a key indicator for traders looking to understand the relative strength of Bitcoin against the traditional safe-haven asset, Gold. Brandt accompanied the tweet with a chart that showed a pattern resembling a parallel channel, with Bitcoin trending down against Gold.
A parallel channel is a technical pattern used to define price movements between two trend lines — one acting as resistance (the upper line) and the other as support (the lower line). In the case of the Bitcoin Gold ratio, the trend depicted resembled that of a descending channel, which is commonly used to predict overall changes in trends.
This technical pattern suggests that the Bitcoin Gold ratio is experiencing a downward trend, but also indicates that it may soon reach a support level where a reversal could occur.
Bitcoin prices have fallen while Gold prices have achieved a new record high, resulting in a negative correlation between the two.
A period of negative correlation between Bitcoin and Gold, with Gold rising and Bitcoin falling, usually indicates a risk-averse environment in which investors choose traditional safe-haven assets like Gold over speculative assets like Bitcoin.
At the time of writing, BTC was up 3.17% in the last 24 hours to $59,773. The price of Bitcoin rose in weekend trading, hitting its highest mark since the start of September as traders grew more confident that the Federal Reserve’s upcoming meeting might yield a jumbo-sized rate cut.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
