The correlation of bitcoin with gold rushed sharply

The 30-day coefficient of pieron correlation between bitcoin and gold reached 0.54, approaching the annual maximum at 0.73. This may indicate strengthening the narrative of a protective asset among investors, the researchers of The Block noted.

The strengthening of interdependence occurred after the noteworthy “fraught” of the first cryptocurrency from the noble metal in February. Then, within three weeks, a 30 -day correlation collapsed from 0.73 to -0.67.

In early February, Bitcoin traded in the region of $ 102,000, while ounces of gold cost $ 2800. By the end of the month, the first cryptocurrency fell to $ 84,000, and the noble metal went up to $ 2850.

Since then, the correlation coefficient between the mentioned assets has largely restored, rising from -0.67 to 0.52. The probable reason for the “renewal of binding”: “liberation duties” that contribute to the growth of macroeconomic uncertainty and a decrease in the dollar index.

Is history repeated?

If we study historical patterns, the “reunification” of bitcoin with gold can be considered as a cyclic phenomenon. The Block experts counted 18 cases since 2020, when the correlation coefficient between bitcoin and gold fell below -0.50 or approached this mark.

In 17 episodes, the indicator was restored after seven days. The only exception is December 2022, when it took a little more than two weeks to return to the initial values.

Historically, every time the correlation coefficient between bitcoin and gold falls below -0.50, cryptocurrency again begins to “strongly attached” to the metal. This process is often accompanied by an increase in the correlation to 0.8 and above, after which the “untied” cycle is resumed. Recall that Nydig researchers announced the strengthening of bitcoin as a protective asset after the “release day” of US President Donald Trump.

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