Bitcoin appears to have decoupled from gold & historical volatility is hinting big move to come...
We may be about to see a big move in BTC
The historical volatility is now at 40%, which has meant a big move is incoming, at least historically.
(It's kind of funny to use the term "historical volatility" and then end the sentence with "historically", but anyways...)
When bitcoin has reached this 40% level in the past, it has lead to a move between 30% and 60% in the following weeks...
Check it out:
(Source: https://twitter.com/Josh_Rager/status/1282300101705310209/photo/1)
Unfortunately 2 of the last 3 moves with a similar setup have been to the downside, but that doesn't necessarily mean much as we were at different points in the halving price cycle.
That being said at this point it could probably go either way, with a slight bias to the upside. The fact that bitcoin is having more trouble going up than stocks are isn't a great sign...
Bitcoin is no longer tracking gold...
On another note, bitcoin has mostly decoupled from gold.
It's correlation with US stocks is at an all time high and volatility is at very low levels, but gold seems to be doing its own thing these days.
That being said, the charts on bitcoin and gold do look somewhat similar, it just looks like bitcoin may be lagging the moves seen in gold, or said another way, it looks like bitcoin could just be following what gold has been doing.
And for all of us who are invested in bitcoin, I sure hope that is the case as gold has been acting very well as of late...
Check this out:
(Source: https://twitter.com/BTC_JackSparrow/status/1281057719823339520/photo/1)
As you can see, gold has already broken out, but bitcoin continues to be mostly range bound for months now.
In my opinion this can interpreted in one of two ways...
It could be that bitcoin is showing relative weakness. IE, in an environment where gold is going up and making new highs, bitcoin is having trouble catching a bid, which is relatively weak price action by comparison.
On the other hand, it could just be that bitcoin is following gold and simply hasn't had its turn in the spotlight yet.
Based on how things have tended to trickle down in the past, I am betting on the latter be the more likely scenario.
Gold benefits first from expected inflation and excessive money printing, but historically it has been shown that eventually that money finds its way into bitcoin, which causes it to break out as well.
Bitcoin just tends to move after gold and stocks have already moved, though on a percentage basis bitcoin moves a lot more...
Sort of like a grand finale to all the excessive money printing.
Time well tell which one this is.
Stay informed my friends.
Image Source:
-Doc