Bitcoin, the largest cryptocurrency by market cap, may imminently target a new all-time high, spurred by its strong correlation with gold.
Gold is booming amid global market instability. The precious metal, primarily seen as a safe haven during economic crises, broke past its previous all-time high in late January and has consistently hit new highs.
The asset started the week with a bang, meeting its 2.2% gains from the previous week in just two days. If the asset holds above its current peak of $2,942 per ounce, it will mark its seventh consecutive week of price appreciation.
On the other hand, Bitcoin has consolidated in the past few weeks after hitting a new all-time high on Inauguration Day. Widely called digital gold, the pioneering cryptocurrency has ranged between $91,000 and $105,000 since then.
Bitcoin to Mend Gold’s Decoupling
Notably, both high-caliber assets have shown a strong correlation over the years. Nonetheless, Bitcoin’s price tends to grow on a larger scale than that of the precious metal.
Analyst Daink recently pointed to the recent decoupling between Bitcoin and gold. While the latter has surged to unprecedented highs, the former has entered an accumulation phase.
Meanwhile, the analyst suggested that Bitcoin may mend this latest decoupling, citing historical trends. He noted that each time gold displaces away from Bitcoin by surging up, the crypto asset always catches up with its trend.
An accompanying chart highlights two scenarios in which Bitcoin has jumped back to a gold correlation.
Bitcoin’s Correlation with Gold
For context, during the 2022 crypto bear market, gold broke out against Bitcoin to new highs while the crypto asset continued to consolidate at its lows following the FTX implosion. However, Bitcoin resumed an uptrend in 2023 and caught up with gold later in the year.
Another scenario occurred last year as Bitcoin consolidated from its March peak at $73,000. During this phase, gold decoupled from Bitcoin, but the asset played catch-up later in the year.
With these historical occurrences, Daink speculates that Bitcoin would match gold’s recent price outperformance in the near future. Nonetheless, he did not give a defined timeframe for the recoupling.
Bitcoin to New All-Time High?
The historical correlation suggests that Bitcoin may soon target new all-time highs. Bitcoin enthusiast Carbon shares a similar sentiment, speculating that Bitcoin will follow through with gold.
He noted in a recent tweet that Bitcoin mirrors gold’s push to new ATHs “a few months later.” He cited that the precious metal has been surging to new highs for some time now, and Bitcoin would follow suit imminently.
Although the analyses from Daink and Carbon failed to predict Bitcoin’s target if it follows gold, earlier commentary suggests where Bitcoin will reach before the end of the year. For instance, Galaxy Research predicted that the crypto firstborn would surge to $185,000 by year-end, driven by adoption.
Other prominent firms like VanEck and Standard Chartered speculated on a surge to $180,000 and $200,000, while JAN3 CEO Samson Mow predicted an ambitious price explosion to $1 million.
In the meantime, Bitcoin trades at $98,372, up less than 1% in the past 24 hours.
