Analysts, including Nikolas Panigirtzoglou, wrote that Bitcoin’s price correction lags a similar move in the gold market. Therefore, in August 2020, when precious metal rallied, investors were encouraged to secure short-term profits and to reinvest profits in Bitcoin. That explains why the cryptocurrency boomed by about 100 percent, while after August the metal dropped by 11.50 percent.
Currently, an inverse fractal is in development. Bitcoin values have overshot and are now predicting a downside reversal to neutralize their signs of momentum. Gold is selling around a flipped $1,764 support mark, meanwhile, hoping to bounce. “For Bitcoin,” the strategists explained, “momentum signals have deteriorated, which will likely cause selling by investors that trade on price trends.”
Latest studies have revealed that the long-term buyers of Bitcoin knew their gains ahead of it touching an all-time high. In a Friday note, Robbie Liu, an investment analyst at the OKEx cryptocurrency exchange, said that retail traders seemed unsure about joining new long positions in the region of $19,500-20,000, enabling major players to overtake as sellers. “Ultimately, we are likely to witness a battle between the whales and retail traders as Bitcoin tries to test the key psychological level of $20,000.”
Peter Schiff, chief executive of a California-based asset management company, Euro Pacific Capital, also noticed that “long-term Bitcoin bulls” chose to sell their gains in order to seek exposure to competing assets such as gold.
JPMorgan analysts said that in the long run, when more and more buyers continue to reshuffle their money from gold markets, Bitcoin could maintain its bullish bias. The bank noted that at the cost of the precious metal, money has poured into the BTC market since October. “The adoption of bitcoin by institutional investors has only begun, while for gold its adoption by institutional investors is very advanced,” the analysts wrote