Data from Glassnode shows the Bitcoin correlation to Gold and Silver has taken a plunge toward cyclical lows recently. Bitcoin Correlation With Gold & Silver Has Now Turned Negative According to data from the on-chain analytics firm Glassnode, the latest price action in BTC has decoupled the cryptocurrency from commodities such as Gold and Silver. The “correlation” here is an indicator that tells us how closely Bitcoin has been moving with any particular asset, over a given time period. In the context of the current discussion, the 30-day time period is of interest. When the value of the correlation is positive, it means that the cryptocurrency is mimicking the movements of the other asset currently. Negative values of the indicator, on the other hand, suggest BTC has been moving in the opposite direction to the commodity’s price. Naturally, the higher the value of the metric (whether on the positive or the negative scale), the stronger the response of Bitcoin to movements in the asset in question. The correlation can also attain a value of zero during periods where there isn’t any discernible pattern between the prices of the two assets (like when one of the assets moves sideways while the other is experiencing some kind of volatility). Related Reading: Bitcoin Holders Expect Retrace, Will BTC Move Against Crowd Once Again? Now, here is a chart that shows the trend in the Bitcoin 30-day correlation to Gold and Silver over the last few years: Looks like the value of the metric has plunged in recent days | Source: Glassnode on Twitter As displayed in the above graph, the Bitcoin 30-day correlation to both Gold and Silver had been high just recently, but with the latest surge in the cryptocurrency, the indicator’s value has taken a deep hit. Following this plunge, the metric’s value has fallen inside the negative territory for both these assets, with BTC’s correlation to XAU (the price of one troy ounce of Gold) hitting -0.78, while that to XAG (one ounce of Silver) going even deeper to -0.90. In the case of Gold, the correlation between the two assets is now close to the cyclical lows, while for Silver, the indicator has already set a new cyclical low with this plummet. Related Reading: XRP Traders Show Capitulation, Why This Could Be Bullish Bitcoin is currently showing such a highly negative correlation to these commodities because of the fact that their prices have been going down recently, while the cryptocurrency has observed a very sharp rally at the same time. The current values of the 30-day correlation pose an interesting shift of trend, as except for a period between late February and early March, Bitcoin had been tightly moving in tandem with these traditional assets since the rally started back in January of this year. It now remains to be seen whether Bitcoin will remain decoupled from these assets in the coming days and do its own thing, or if the break in correlation is only temporary, like the aforementioned instance earlier in the year. BTC Price At the time of writing, Bitcoin is trading around $30,200, up 5% in the last week. BTC hasn't moved much during the last few days | Source: BTCUSD on TradingView Featured image from iStock.com, charts from TradingView.com, Glassnode.com
