Bitcoin Correlation with Gold Hits Six-Year High Amid US Debt Concerns

The correlation between Bitcoin (BTC) and gold has hit a six-year high, according to recent data from Bitwise. The 90-day correlation between the two assets has jumped to levels not seen since the pandemic era, with a reading of 0.50 or higher indicating a strong link.

Bitwise's head of research in Europe, André Dragosch, notes that the Treasury's bond buyback announcement was a key driver of this correlation. He observes that government interventions often contribute to spikes in the Bitcoin-gold correlation, with the current situation being no exception.

The analyst suggests that the challenges facing the US dollar may benefit both gold and Bitcoin, as investors seek safe-haven assets amidst growing debt concerns. This is evident in the recent price action, where Bitcoin achieved a 25% monthly gain in August, while gold prices rose by almost 10% during the same period.

The golden cross, a bullish signal formed when a short-term moving average crosses above a long-term one, is also flashing for Bitcoin. This could be a significant indicator of a long-term bull market trend. However, short-term price action may still lean towards a deeper retracement below $80,000.