Bitcoin
Bitcoin follows gold as both rise to highest values since August
As institutional investors increase their BTC holdings, the correlation between the leading coin and gold continues to climb.
- On 19 October, the prices of Bitcoin and gold surged to a two-month high.
- BTC’s fund market premium showed increased activity from institutional investors since the month started.
Bitcoin [BTC] and gold climbed to their highest values since August during the intraday trading session on 19 October, with BTC climbing above $28,000 and gold rallying past $1,950.
?? With the #dollar returning around a 2023 high, this rise in fiat value has normally had a negative impact on #crypto. But at least with #Bitcoin, a 2-month high was still able to be hit today. Digital gold and physical gold are moving up in tandem. https://t.co/OJBmNP9aQF
pic.twitter.com/EKvrJzKqXs— Santiment (@santimentfeed) October 19, 2023
How much are 1,10,100 BTCs worth today?
An assessment of the 30-day correlation coefficient between BTC and gold showed a significant surge in the correlation between the two assets in the last week.
Whenever this happens, it means that the prices of the two assets are moving in sync. At press time, this correlation stood at 0.04, growing by over 100% in the last seven days, according to data from IntoTheBlock.
Source: IntoTheBlock
Read Bitcoin’s [BTC] Price Prediction 2023-24
Institutional investors taking a peek at BTC
A notable cause of a surge in correlation between gold and BTC is an increase in institutional investments.
An assessment of BTC’s Fund market premium metric revealed an uptick in institutional investor eagerness over the last week to put their money in investment assets (BTC trust) that derive their price from the coin’s price movements.
Fund market premium refers to the difference between the market price of a fund and its Net Asset Value (NAV). A Fund market premium can occur when investors are willing to pay more for a fund than its NAV.
This could be due to several factors, such as the fund’s performance, investment strategy, or overall market sentiment.
In the last week, BTC’s Fund market premium has increased by over 10%, according to data from CryptoQuant.
On a month-to-date (MTD), this has rallied by 27%. This suggested a steady inflow of institutional funds into BTC investment assets, hence the growth in the coin’s correlation with gold.
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Price to climb further, analyst brings good tidings
In a recent report, pseudonymous CryptoQuant analyst Dan Lim opined that BTC’s price might witness a further rally in the current cycle.
Read Bitcoin’s [BTC] Price Prediction 2023-24
Lim assessed the relationship between BTC’s short-term Spent Output Profit Ratio (STH-SOPR) and its Bollinger Bands (BB). He found that the STH-SOPR indicator had touched the lower part of the coin’s BB.
Whenever this happens, it means that short-term investors are selling at a loss. According to Lim, this was a bullish signal, as it suggested that short-term investors had pent-up demand to buy BTC once the price recovers.
Source: CryptoQuant
