Those who follow gold and Bitcoin would have seen some similarities in their charts as both saw a drop from a sell off on Tuesday, but according to TradingAnalysis.com founder Todd Gordon there is no such relationship or correlation, and in fact, Bitcoin is the better bet for another rally.
A short-term chart overlay (below) seems to suggest that gold and Bitcoin are moving in tandem in terms of their growth, but in reality, the long-terms charts paint a very different picture for these two competitor assets.
Gold and Bitcoin over the month of August
Breaking the ceiling
Looking at a graph of the two assets since March, Gordon points to how gold has struggled to break through the $1,300 level three times. In fact, when gold failed and then dipped, Bitcoin saw big rallies over the precious metal.
“The three major peaks in gold were associated with Bitcoin at $1,222, in June at $2,969 and more recently at $4,374,” said Gordon. “So as gold has triple topped at around $1,300, Bitcoin is making new highs.”
It is a simple analysis that has the trader, Gordon, concluding simply that because if gold’s failure to reach $1,300 occurs there is only one buying opportunity here, and it is with Bitcoin as the cryptocurrency is up 326 percent this year alone already.