The price of Bitcoin is now “walking in the footsteps of gold,” and it has been this way since April 2022, analysts at The McClellan Market Report noted.
“I should emphasize here that the magnitudes of the price movements in each market do not match. It is all about the direction of movement and the timing of the turns,” they said.
“But I figure that in any market, if I get the direction and timing right, then the magnitudes can take care of themselves.”
Recent analysis suggests that gold prices have been a precursor to Bitcoin's price movements by approximately one week. Essentially, the "dance steps" gold performs today appear to be mirrored by Bitcoin a week later, analysts observed.
During March 2024, a period of lateral movement in Bitcoin's prices closely followed a similar phase in gold prices from the previous week. Gold prices eventually exited this "flag" structure, embarking on an upward trend, a pattern Bitcoin has just begun to emulate, signaling an upcoming surge in Bitcoin prices within the next week.
“It looks like that move should be to a new high, based on gold's structure. But remember that while the dance steps largely match, the magnitudes do not necessarily get echoed perfectly,” they explained.
“And having said that, there are moments when the patterns of dance steps do not quite replicate perfectly either, and longtime traders will immediately know that prices are more likely to deviate from the plan at the moment one is counting on them most to follow the plan.”
Analysts at The McClellan Market Report admit they don’t know what makes this newfound correlation between gold and Bitcoin prices work, nor why it didn’t work prior to April 2022.
“I cannot come up with any good explanation for why that moment should mark the start of their new correlated relationship. But it did,” they said.