Data from Glassnode reveals that the correlation between Bitcoin and Gold and Silver has reached its lowest point in recent times. This correlation indicates how closely Bitcoin moves in relation to these commodities over a specific time period. A positive correlation means that Bitcoin mimics the movements of the other asset, while a negative correlation suggests the opposite. The higher the value of the correlation, the stronger the response of Bitcoin to the asset’s movements. The correlation can also be zero when there is no discernible pattern between the prices of the two assets.
The chart presented in the content illustrates the trend in Bitcoin’s 30-day correlation to Gold and Silver over the past few years. The correlation had been high until the recent surge in Bitcoin, which caused a sharp decline in the indicator’s value. The correlation for both Gold and Silver has now entered negative territory, with Gold nearing cyclical lows and Silver already setting a new cyclical low.
The reason for Bitcoin’s highly negative correlation to these commodities is that their prices have been falling while Bitcoin has experienced a significant rally. This shift in correlation poses an interesting trend, as Bitcoin had previously closely followed the movement of these traditional assets. It remains to be seen whether the decoupling between Bitcoin and these assets will continue or if it is only temporary. Currently, Bitcoin is trading around $30,200, with a 5% increase in the last week.
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