Bitcoin (BTC) could be sucked like a magnet towards $50,000 if it continues to follow gold, new analysis predicts.
In a Jan. 26 Twitter update, popular trader and market commentator TechDev presented a high new BTC price target pegged to XAU/USD.
Gold, Bitcoin Inverse Dollar Correlation “Without a Question”
Bullish price assumptions are emerging as the debate over how much Bitcoin will compete with gold continues.
For TechDev, the outlook is more optimistic than many – Bitcoin could even break the $50,000 mark.
“What if Bitcoin continues to follow Gold/DXY?” he asked.
An accompanying chart compared BTC/USD to gold versus the US Dollar Index (DXY). The precious metal, TechDev says, while continuing an earlier narrative, hinted Bitcoin could lead in terms of its recovery.
BTC/USD vs. XAU/DXY annotated chart. Source: TechDev/Twitter
As Cointelegraph reported, the correlation between gold and bitcoin is now close to 100%.
“Aside from momentary reactions to geopolitical events… do you think gold has led bitcoin for 4 years?” asked a previous Twitter thread.
TechDev added the idea was “not a prediction. A valid question.”
“Would be interesting if it works. The inverse correlation of both assets to the dollar is unquestionable,” he concluded.
If Bitcoin continues to chase gold in relative terms, the outcome could be a turning point for bulls. XAU/USD is up 6.1% year-to-date – already well below BTC/USD’s 39% gain, according to data from Cointelegraph Markets Pro and TradingView.
According to TechDev, Bitcoin now has a chance to surpass not only $30,000 but even $50,000.
BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView
Analyst: Gold faces a huge trade push imminent
Even gold bugs, traditionally far from Bitcoin’s allies, are looking to a new happy era for the metal’s own fortunes.
Also Read: Bitcoin Faces ‘Significant Risk’ From Fed In 2023 – Lyn Alden
Alasdair Macleod, head of research at Goldmoney, brought geopolitics to the fore in his forecast this week, predicting a significant upturn in gold-based trades in Russia, China and across Asia.
“Russia will not make any formal announcements about gold standards because there is no need to. Neither will China: instead, it may reveal an increase in gold reserves,” reads a Goldmoney article published Jan. 26.
Macleod himself isn’t a bitcoin fan, with a special article comparing it to gold as money in December flatly predicting the latter would win in a crisis.
“To validate its status as money, Bitcoin must obey the laws of time preference. In other words, its current relationship with interest rates needs to change so that rising interest rates, reflecting fiat currencies’ loss of purchasing power, should be reflected in rising values for bitcoin,” he wrote.
“We will not try to guess that future. But we can confidently say that if currencies’ depreciation accelerates, the relative value of gold will rise accordingly, while Bitcoin’s may not.”
Other popular commentators have been more flattering, such as Mike McGlone, senior macro strategist at Bloomberg Intelligence, who frequently entertained that Bitcoin outperforms gold over the long term.
XAU/USD 1-day candlestick chart. Source: TradingView
The views, thoughts, and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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