At this moment, Ki Young Ju stated that the relationship between Bitcoin and gold has begun to strengthen again. According to Ju, the ratio between $BTC and gold has returned to levels observed during the period when Bitcoin was considered “digital gold.”
Is Bitcoin Returning to the ‘Digital Gold’ Era?
The CEO of CryptoQuant, X, posted a chart on his account showing the 90-day Pearson correlation coefficient between Bitcoin and gold. According to the data released by CryptoQuant, the correlation has quickly recovered and exceeded 0.6.
A correlation coefficient close to 1 between gold and Bitcoin indicates a stronger tendency for the price movements of these two assets to move in the same direction, while values below 0 suggest they move in opposite directions.
At present, according to the chart, the correlation between Bitcoin and gold generally remained in the positive range until last year but sharply declined from the end of last year, dropping to around -0.8 at the beginning of this year. This led to a significant divergence in the movements of these two assets.
Because, while the price of gold was rising during that period, Bitcoin showed a different trend and experienced a decline.
According to the famous CEO's report, the correlation coefficient between the two assets has recently recovered rapidly, returning to the positive zone. This means that Bitcoin and gold have recently again shown a strong tendency to move in the same direction. Moreover, Ju's recent assessment suggests that with the resumption of strengthening price linkage between Bitcoin and gold, the “digital gold” concept for $BTC may become relevant again.
A Short-Term Peak May Form in Bitcoin!
In its latest report, the analysis firm CryptoQuant assessed that Bitcoin may continue its upward trend in the short term, reaching a peak, after which a deeper decline will begin.
According to CryptoQuant analysts, based on Elliott Wave Theory, $BTC is approaching a short-term peak in the range of $66,317–$68,965, after which it could face a deeper decline.
The analysts noted that the downward wave pattern “i~v,” representing the five sub-waves used in Elliott Wave analysis, indicates that the broader bear market trend remains strong.
In this context, the analysts suggest that Bitcoin's current recovery could be part of a downward movement within the bear market. According to the analysts, if the expected peak is reached, the final “V” wave may begin, and a new wave of $BTC selling could be observed.
They also added that on-chain indicators confirm the downside risk.
CryptoQuant analysts also noted that while Bitcoin is forming higher peaks, the MACD indicator shows a bearish trend. The RSI indicator has also moved into the overbought zone.
This indicates that while the price is rising, the momentum is not strengthening to the same degree.
The analysts also added that the next important target level they are watching in case of a price decline is $51,336.
*This is not investment advice.
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