Bitcoin’s Next Surge: Could Gold’s Momentum Hold the Key?

Bitcoin traders who want clues about when the world’s top cryptocurrency might reach new all-time highs should take a look at gold’s price trends. Historical patterns from 2020 suggest that Bitcoin could make a major move once gold’s current bullish run slows down.

Since April, Bitcoin has been bouncing between $50,000 and $70,000, limited by both crypto-specific factors and broader market conditions. During the same period, gold has surged over 20%, hitting record highs above $2,700, with its yearly gain now at 37%. Silver, too, has jumped 43% this year, reaching a 12-year peak. Gold began its climb from around $1,450 at the end of 2019, largely driven by central bank stimulus and the economic impact of the COVID pandemic, and hit a historic $2,000 per ounce in mid-2020.

In contrast, Bitcoin remained relatively stable throughout most of this period, staying near its previous high of $20,000, aside from a sharp drop during the initial COVID panic. But once gold’s rally began to stall in late 2020, Bitcoin started a dramatic rise, climbing from $10,000 to over $60,000 by March 2021. This suggests that Bitcoin’s big moves could be influenced by a slowdown in gold’s momentum.

If this trend holds true, Bitcoin may be poised for a breakout once gold’s rally slows, though it remains uncertain whether this pattern will repeat. At the moment, gold’s uptrend shows no signs of exhaustion, supported by strong inflows into gold ETFs, particularly from U.S. retail investors through SPDR Gold Shares (GLD). Similarly, Bitcoin ETFs have seen a surge in inflows, with $2 billion added in the past seven days, suggesting rising interest in both assets.

However, not all these inflows are for long-term holding; about 40% of Bitcoin ETF activity is tied to basis trading. Still, traders remain hopeful for a new Bitcoin high, especially after the upcoming U.S. elections.

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