The correlation between bitcoin and gold has turned sizably negative in recent times, with gold pushing to new record highs above $2,500 per ounce while bitcoin has declined and now sits more than 20% below its all-time high above $73,000 from March.
The move into gold and out of bitcoin has come as U.S. stocks have struggled, with the S&P 500 slipping 3.6% since August 30. CryptoQuant's Bull-Bear Market Cycle Indicator has been in BEAR phase since Aug. 27, when BTC was trading at $62,000.
The MVRV ratio (market-value-to-realized-value), has also been below its 365-day moving average since Aug. 26, which suggests a further price correction may be on the cards, said CryptoQuant. The MVRV ratio dipping below the moving average acted as a precursor to a 36% drop in May 2021.
The decline in bitcoin's price has also come alongside a drop in the U.S. dollar index, another indicator of broader risk aversion and uncertainty, according to CryptoQuant.
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