Tuesday’s sell-off in both bitcoin and gold has many suspecting that the two are correlated, but Todd Gordon thinks that not only is there no such relationship, bitcoin is also the better bet for a rally.
The TradingAnalysis.com founder says that while a shorter-term chart of bitcoin and gold together may show that the two are moving in tandem, a longer-term chart actually tells a different story. Looking at a four-hour chart of bitcoin and gold, Gordon remarked Tuesday on CNBC’s “Trading Nation” that “the two have run up fairly well here together in August.”
However, looking at a chart of both dating to March, Gordon remarks that while gold has failed to break through the $1,300 level three times, bitcoin actually saw big rallies right when the yellow metal dropped.
“The three major peaks in gold were associated with bitcoin at $1,222, in June at $2,969, [and more recently at] $4,374,” said Gordon. “So as gold has triple topped at around $1,300, bitcoin is making new highs.”
The consistent rally in bitcoin and gold’s failure to reach $1,300 has the trader concluding that out of the two, there is a “buying opportunity in bitcoin.”
The cryptocurrency has surged this year and is now up about 326 percent year to date.