Bitcoin (BTC) could be sucked towards $50,000 like a magnet if it continues to follow gold, a new analysis predicts.
In a January 26 Twitter update, popular trader and market commentator TechDev presented a new lofty BTC price target tied to the XAU/USD pair.
Gold, Bitcoin inverse correlation of the dollar “without a doubt”
As the debate rages on to what extent Bitcoin will compete with gold, bullish positions emerge.
For TechDev, the outlook is more rosy than many: Bitcoin could even break the $50,000 barrier.
“What if Bitcoin follows in the footsteps of gold/DXY?” he wonders.
An accompanying chart compared the BTC/USD pair to gold against the US Dollar Index (DXY). The precious metal, TechDev hinted while continuing an earlier narrative, may be getting ahead of Bitcoin in terms of its recovery.
As Cointelegraph reported, the correlation between gold and Bitcoin is now practically 100%.
“Outside of momentary reactions to geopolitical events… Do you think gold has been leading bitcoin for 4 years?” he asked in a previous Twitter thread.
TechDev added that the idea was “not a forecast. A legitimate question.”
“It would be interesting if it is fulfilled. The inverse correlation of both assets with the dollar is unquestionable,” concluded.
If Bitcoin continues to chase gold on a relative basis, the result could be a game changer for bulls. The XAU/USD pair is up 6.1% year to date, well below the BTC/USD pair by 39%, according to data from Cointelegraph Markets Pro and TradingView.
According to TechDev, Bitcoin now has chances to break not just $30,000, but even $50,000.
Analyst: Gold Set for Imminent Big Trading Push
Even gold advocates, traditionally estranged from Bitcoin allies, envision a rosy new era for the metal’s fortunes.
Alasdair Macleod, Goldmoney’s head of research, has brought geopolitics to the forefront of his forecasts this week, predicting a major rebound in gold-based trade in Russia, China and across Asia.
“Russia will not make formal announcements on gold standards, because it is not necessary. Neither will China: it could reveal rising gold reserves instead,” read part of a Goldmoney article published on Jan. 26.
Macleod himself is not a fan of Bitcoin, and in a December article comparing it to gold as money he strongly predicted that the latter would come out on top in a crisis.
“To assert its status as money, bitcoin will have to obey the laws of time preference. In other words, its current relationship with interest rates must change, so that the increase in interest rates, which reflects the loss of purchasing power of fiat currencies, is reflected in the increase in the value of bitcoin”wrote.
“We will not try to guess this future. But we can confidently say that if the debasement of currencies accelerates, the relative value of gold will rise accordingly, while that of bitcoin might not.”
Other popular commentators have been more complimentary, such as Mike McGlone, a senior macroeconomic strategist at Bloomberg Intelligence, who frequently believes that Bitcoin will outperform gold in the long run.
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