Cryptocurrency research firm Wolfe Research suggests that gold could potentially outperform Bitcoin as the Bitcoin price hovers around $70,000.
Both of these assets have traded in sync over the past month, hitting new records even as the U.S. stock market continues to trade near its highest levels.
According to analysts, Bitcoin's trading patterns mirror its own 2021 movements, where it rose to new all-time highs twice before experiencing a significant pullback. “Bitcoin has historically traded more like a ‘risk asset,’ often finding a home for excess liquidity for the retail investor,” said Rob Ginsberg, managing director at Wolfe.
Ginsberg is not predicting a 50% correction like last time, although the similarities with the 2021 model are undeniable. However, he would not be surprised to see Bitcoin continue to hold steady just above $70,000.
On the other hand, according to the analyst, gold may be in a better situation. “Gold and Bitcoin ratio is approaching support while oversold on a weekly basis,” Ginsberg said and added:
“If our views on Bitcoin are correct and it continues to consolidate in the $60,000-$73,000 range, this could provide a good opportunity for gold to start outperforming.”
Bitcoin reached an all-time high of $73,679 on March 14 and fell to around $60,800 last week as traders absorbed the run. Although Ginsberg warned that selling pressure “has historically emerged strongly above $70,000,” BTC has since rebounded to its highs and looks poised to accelerate again.
*This is not investment advice.