Gold Sinks as Bitcoin Price Nears Record High

CRYPTONAIRE LYWEEK

CRYPTO investment journal

Gold Sinks as Bitcoin Price Nears Record High

It seems that economic crises are the fuel that feeds Bitcoin’s engines. While 2020 was a catastrophic year for the global economy, BTC has managed to recover almost all the value it lost in 2018 after an extended bearish correction.

This trend has intensified in recent days, as markets stay optimistic after Trump’s defeat and the rollout of a COVID-19 vaccine gets closer. Bitcoin has been outperforming traditional investments, including gold, considered the store of value par excellence in the world of international finance.

Gold is coming down to earth

The past few weeks’ events have made gold less attractive as investors begin to buy shares in businesses that may soon recover from the global economic downturn—such as pharmaceutical or logistics companies. And the charts show it.

Gold has been correcting downwards since August, maintaining strong support near $1,835. Lower and lower spikes are a warning signal for hodlers. The metal stopped being overbought and is moving toward a more balanced ratio between buyers and sellers.

But this week started off ugly for the precious metal with a drop of nearly $45 between its daily high and its current price. Short-term traders should beware of a possible bearish breakout, as its current price of $1,838 an ounce is dangerously close to the support.

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