U.Today – Veteran trader Peter Brandt recently shared his thoughts on the bitcoin-to-gold ratio, suggesting that a tradeable low could be on the horizon.
In a recent tweet, Brandt provided an analysis of the Bitcoin/Gold indicator, which compares the price to gold. The indicator is a key indicator for traders looking to understand the relative strength of Bitcoin versus the conventional safe-haven asset, gold. Brandt accompanied the tweet with a chart that showed a pattern resembling an equal channel, with Bitcoin trending lower 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 indicator, the trend shown resembled a descending channel, which is commonly used to predict general trend changes.
This technical pattern suggests that the Bitcoin Gold indicator is in a downtrend, but it also indicates that it may reach a support level soon, which could result in a trend reversal.
Bitcoin is separating from gold
According to a recent analysis by CryptoQuant, Bitcoin has decoupled from gold, with prices falling as gold hit record highs.
The price of Bitcoin fell and the price of gold reached a recent record high, resulting in a negative correlation between the two metrics.
A period of negative correlation between bitcoin and gold, where the price of gold is rising and the price of bitcoin is falling, typically indicates a risk-averse environment where investors are choosing conventional, safe-haven assets like gold over speculative assets like bitcoin.
At the time of writing, BTC is up 3.17% in the past 24 hours to $59,773. Bitcoin price surged in weekend trading, reaching its highest level since early September, as investors grew increasingly confident that the upcoming Federal Reserve meeting could bring a significant interest rate cut.
