Bitcoin Rally Faces Fresh Risks as Correlation with Gold Hits Six-Year High
Bitcoin's rally towards $85,000 is facing fresh risks from various fronts. The cryptocurrency has seen its correlation with gold reach a six-year high, suggesting investors are using it as a hedge against U.S. fiscal threats.
A weak spot demand in the U.S., as indicated by the Coinbase premium index, raises concerns that the rally may not be sustainable without stronger buying support. According to CryptoQuant data, short-term holder whales are sitting on record $9 billion in unrealized profit, which could prompt near-term selling pressure if prices weaken.
The Federal Reserve's upcoming rate hike decision, oil prices, and the yen carry trade will also play a crucial role in determining Bitcoin's next move. A bearish divergence between Bitcoin's price and on-balance volume (OBV) has been noted by crypto market analyst Ted Pillows, which could be a warning sign that the rally is losing strength.