Bitcoin's Follows Gold As Both Assets Plummet

By 04:50 UTC, Bitcoin was trading around $11,326, having hit lows of $11,150 during the selloff. Gold recovered from its $1,901 low to trade at $1,917.

The parallel decline captured analyst focus because of a growing synchronization between the two assets. Data from Skew Analytics showed their monthly correlation at 70%, a record high. The figure surpassed peaks observed in 2018 and again in May 2019, strengthening Bitcoin's standing as "digital gold" and a store of value alongside traditional precious metals.

Charles Edward of Capriole Fund referenced the milestone on Twitter. "The correlation is proof that Bitcoin is digital gold," he wrote, posting the chart. He observed that whenever market risk climbed since 2019, Bitcoin and gold's correlation had followed suit, reaching new records each time. The two assets now moved in tandem more than half the time, Edward noted, tracking close to double the ratio from the prior peak.

The technical picture on Bitcoin deteriorated as the losses mounted. On the four-hour timeframe, price had slipped below the 10-period simple moving average and the 50-period simple moving average. The RSI was declining, a sign that selling pressure had overtaken buying interest. The Asian trading session had initiated the move lower, and the weakness continued as traders reassessed positions. Some technicians viewed the RSI action as a sign that bullish momentum had stalled, with pullbacks possible in the days ahead.