• Binance’s September trading report revealed that over the past few years, whenever Bitcoin has gone on a bull rally, there has been some sort of correlation with the traditional market. However, in 2020, the tables appeared to have turned a bit since Bitcoin mirrored Gold more than other markets.

    Bitcoin, the world’s number one cryptocurrency, seems to be on a bullish trajectory again. Despite the fact that for long, Bitcoin has been accused of being either too volatile or moving too sideways. While the analysis drawn out over the past months has alternated between derivatives impact, on-chain metrics, and traditional stock correlations, the one thing that has remained common is the essence of unpredictability. Uncertainty, ergo, seems to be the only constant in the Bitcoin market.

    Every time Bitcoin has rallied higher in the past 9 months, the correlation with Gold has indirectly played a part, with both assets registering high levels of correlation. The importance of this fact is fairly high at the moment because Bitcoin and Gold have a negative correlation, according to recent data. At the time of writing, it was continuing to dip, falling to -26.6%.

    Now, with Bitcoin eyeing another breakout, the falling correlation with Gold suggests it needs to trigger its own rally.

    So, is Bitcoin’s $11,000 crossing in trouble? It is temporary in the sense that Bitcoin might not have a strong base to consolidate on if it actually rallies over the coming days. It is possible that the recent bullish wave might have been kickstarted after Square bought $50 million into Bitcoin as a capital investment. That being said, MicroStrategy’s $500 million-splash hardly made a dent.

    As mentioned above, Bitcoin’s price has a sound whiff of unpredictability right now, and one of the things that might activate BTC’s rally is a declining U.S dollar, with the fiat currency continuing to face huge selling pressure in the larger market.

    While many speculators would pin it on high volatility for the imminent/expected rally, it may be too soon to confirm so. Hence, eliminating Gold-BTC correlation, derivatives impact, and volatility, Bitcoin’s current rally is certainly on its path to another period of uncertainty.

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