Bitcoin Falters as Gold Retakes the Spotlight
Bitcoin (BTC) is facing renewed pressure as it fails to keep pace with gold‘s recent surge. The precious metal has been a standout performer in the markets, gaining nearly 5% this week. Meanwhile, Bitcoin has struggled to maintain momentum, teetering near monthly lows ahead of the May 6 Wall Street open.
The divergence in performance is raising questions about the correlation between Bitcoin and gold, which has been a topic of much discussion within the crypto community. Some analysts believe that the correlation is weakening as the macro environment shifts. Others, however, maintain that the two assets are still closely tied, pointing to the recent period of strong correlation in April.
Traders Eye Short-Term Slump
While Bitcoin has been consolidating in recent days, several traders are expecting a short-term pullback in the price. The MACD indicator, a popular measure of trend strength, is showing conflicting signals on different timeframes. While the weekly MACD is signaling a bullish crossover, the daily MACD is indicating a bearish crossing below the zero line.
The market is also awaiting the Federal Reserve’s interest rate decision on May 7, which could significantly impact both Bitcoin and gold prices. The outcome of the meeting could influence investors’ risk appetite and their outlook on both safe haven assets and riskier assets like Bitcoin.
Divergent Perspectives on the Bitcoin–Gold Correlation
There are differing opinions among analysts regarding the future of the Bitcoin–gold correlation. QCP Capital, a trading firm, believes that Bitcoin may be decoupling from gold‘s safe haven bid and aligning more closely with broader risk proxies. This suggests that the two assets are becoming more independent of each other.
“Crypto implied vols remain suppressed, with front-end skew drifting back toward neutral and spot largely directionless,” QCP Capital stated in its latest bulletin. “At the same time, the FX shakeup coincides with a nearly 3% surge in gold on Monday, as investors lean into the weaker-dollar narrative and price in geopolitical risk premia, including prospective US trade diplomacy.”
On the other hand, trading resource The Kobeissi Letter sees the “first gold, then Bitcoin” narrative as still relevant. The firm observes that Bitcoin followed gold‘s strong gains in April, suggesting a sustained correlation between the two assets.
“In April, Bitcoin joined the gold run, increasing correlation for the first time in months. Between April 7th and April 21st, gold surged +15% along with +12% in Bitcoin. The flight to decentralized and inflation-protected assets is strong. Keep watching this trend.”
Ultimately, the future direction of the Bitcoin–gold correlation remains uncertain. The upcoming Fed decision, ongoing macroeconomic shifts, and evolving investor sentiment will likely play a significant role in determining the relationship between these two assets.
