Bitcoin price rally is in jeopardy as gold and the US dollar show signs of recovery

Dan Tapiero, Co-Founder of 10T Holdings, said weak hands were shaken on the gold market. This increases the likelihood of a gold rally in the near future, especially due to an 80-day retracement period.

A rally in gold and the dollar could lower the price of bitcoin

Bitcoin has seen strong momentum over the past three months. Recently reached an all-time high on Coinbase and other major exchanges.

Despite this, The threat of a correction for Bitcoin is a real possibility if gold begins to rise in parallel with the US dollar.

The biggest gold outs in three weeks. Source: Dan Tapiero, BofA
Bitcoin price rally is in jeopardy as gold and the US dollar show signs of recovery
Bitcoin price rally is in jeopardy as gold and the US dollar show signs of recovery

According to Tapiero The largest three-week sell-off in gold history increases the likelihood of an uptrend. The wrote::

“Very bullish on #gold. The biggest sell-off in three weeks has just occurred. Weak hands have been cleared. $ 25 billion went to emerging markets (EM) stocks, much more to US stocks. Only $ 8,000 million was in gold invested. Maybe a small amount in #bitcoin. #BTC still isn’t big enough to be a macro asset class … but very soon. “

Some might view gold’s rebound as positive for Bitcoin in the medium term. As more investors begin to see BTC as a store of value, An uptrend in gold could benefit cryptocurrency.

Still, there is a stronger case and it is that Bitcoin’s rally coincided with the major gold exits, as reported by Cointelegraph. That means A sharp spike in the price of gold could affect BTC’s momentum in the short term.

The parabolic uptrend in US stocks is another factor to consider

The US stock market continues to rise due to the unprecedented liquidity of the central bank. The combination of average inflation and financial easing conditions has pushed stocks to record highs.

As a result, Jan Nieuwenhuijs, Independent financial investigator for The Gold Observer, reported that US stocks had their best month since 1987.

There is a possibility that the ongoing uptrend in US stocks may make other risky assets less attractive in the short term. This could also make BTC less urgent for retail and institutional investors in the near future.

nowadaysMany traders believe Bitcoin is facing a deeper drop to $ 18,600 after its recent rejection.

Michael van de Poppe, Full-time trader on the Amsterdam Stock Exchange, said the $ 19,100 drop in BTC, with a strong backlash from sellers, makes a deeper drop likely. Wrote::

“Failed to break above $ 19,400 as the critical bills, whereupon it fell to $ 18,800. The $ 19,100 area was immediately rejected and the likelihood of a drop increased to $ 18,600.”

Bitcoin (BTC) is threatened with a retreat, while analysts expect gold to rebound strongly. The precious metal has underperformed BTC for the past few weeks as the market-leading cryptocurrency rallied, led by growing institutional interest.

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