(Kitco News) As Bitcoin clings to support above the $19,000 level, the correlation between the world’s largest cryptocurrency and gold is rising, Bank of America (BofA) says. This means investors are using Bitcoin as a safe haven.
When analyzing market activity, BofA noted that the relationship between Bitcoin and gold is noteworthy.
Positive correlation with SPX/QQQ slows down, correlation with XAU rises sharply [gold] BofA’s cryptocurrency and digital asset strategists Arkesh Shah and Andrew Moss said, “In the face of continued macro uncertainty and the lack of a bottom in the market, investors are looking for bitcoin as a relatively safe haven.” indicates that it may be considered
The correlation between Bitcoin and gold is viewed as an inflation hedge/store of value, the strategist explained.
From June 2021 to February 2022, the correlation remained near zero. It turned negative in March 2022. Shah and Moss wrote in a report released on Friday that the correlation turned positive in September and continued to rise.
Overall, market activity in the crypto space has shown limited directional confidence as investors sit on the sidelines and wait for macro/investor capitulation, according to the report.
The market value of the top 100 digital assets has fallen 3% over the past two weeks and is down 60% year-to-date.
Over the past four weeks, Bitcoin saw a $2.6 billion outflow from exchanges, according to strategists. Forex outflows in 3 of the last 4 weeks (BTC +2% in the last 4 weeks) show that investors are continuing to HODL rather than sell hard, said Shah and Moss. rice field.
Last week alone, bitcoin exchange outflows totaled $1.4 billion, the largest since mid-June. And that means more bearish sentiment in the short term. Shah and Moss wrote, “Weakness, supply shortages and massive and sustained outflows into whale stocks point to limited near-term selling pressure.”
Bitcoin It last traded at $19,502, up 1.5% on the day but down 72% from its all-time high of $69,000 in November 2021.
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