Bitcoin faces difficulties as it approaches potential sub-$92K levels, unable to match gold’s nearly 5% increase this week. Traders are observing its correlation with gold amidst macroeconomic shifts. Recent analyses show mixed technical signals, particularly from the MACD, while attention also shifts to the upcoming Federal Reserve meeting on May 7.
Bitcoin is facing yet another challenge as it struggles to keep pace with gold, which has made significant gains of nearly 5% this week. This emerging dynamic raises eyebrows regarding Bitcoin’s correlation with gold in an ever-evolving macroeconomic landscape. Traders are beginning to predict a short-term decline even as BTC may be poised for a bounce back. Bitcoin’s recent moves indicate it might be heading towards a retest of support just below the $92,000 mark.
Recent data obtained from Cointelegraph Markets Pro and TradingView indicates that Bitcoin, trading around $95,000, has seen momentum stall ahead of the recent daily close. As BTCUSD approaches the crucial yearly open support level of $93,500, the cryptocurrency seems trapped in a state of uncertainty while gold manages to reclaim its ground effectively. Gold (XAU/USD) showed a daily increase of 1.5% at the time of reporting, tallying up to a notable 4.4% rise for the week.
In a recent update to subscribers on Telegram, QCP Capital noted that “crypto implied volatilities remain limited, and front-end skew tilted back towards neutral. The spot market appears largely directionless,” they wrote. The trading environment has witnessed fluctuations in the macroeconomic scope, highlighted by a declining dollar and a surge in emerging market currencies, particularly the Taiwanese dollar, alongside gold’s ascent. This phase appears to coincide with a significant nearly 3% jump in gold on Monday, as investors react to a weaker dollar narrative and incorporate geopolitical risks, including upcoming US trade diplomacy discussions.
However, Bitcoin hasn’t mirrored gold’s performance, leading QCP to forecast a potentially “binary” situation for Bitcoin—where it either decouples from gold’s perceived safe haven status or reconnects with broader risk assets. Meanwhile, The Kobeissi Letter provides a different perspective, suggesting a persistent correlation between the two assets. They highlighted Bitcoin’s alignment with gold earlier in April, marking a notable correlation increase for the first time in months; Bitcoin soared alongside gold, with Bitcoin increasing 12% in parallel with gold’s 15% jump between April 7 and April 21.
From a technical viewpoint, it seems that Bitcoin traders are speculating that BTC might be consolidating as part of a broader rebound. This speculation is supported by insights derived from the moving average convergence/divergence (MACD) indicator, a crucial trend strength measure that is currently sending mixed signals over various time frames. Popular trader Dave The Wave has pointed out a bullish signal on Bitcoin’s weekly MACD, contrasting with bearish indications on the daily chart, which show a crossover below the zero line.
As the macroeconomic stage unfolds, traders await the pivotal Federal Reserve meeting on May 7, focusing on potential interest rate adjustments alongside Jerome Powell’s upcoming speech. Several analysts, including Keith Alan, co-founder of Material Indicators, expressed skepticism about the capacity of the yearly open to serve as a reliable support level. In his words, he would be “pleasantly surprised” if it holds.
And remember, this article is purely informational and does not serve as financial advice. Investment and trading carry risks, and it’s vital to do thorough research before making any decisions.
