Gold’s price has been surging lately in an almost “up-only” trajectory over the past several months.
After this impressive rally, a critical indicator related to the yellow metal has reached peak levels. In the following lines, we will analyze how this might trigger a rally for Bitcoin (BTC).
Rotating Capital?
Gold remains the world’s biggest asset in terms of market cap, recently widening its lead over major tech giants. Its capitalization has climbed to almost $29 trillion, while NVIDIA (the runner-up) is far behind with approximately $4.5 trillion.
The increased dominance follows the impressive rise of the precious metal’s price, which has soared by roughly 56% in the past year and recently hit a new all-time high of almost $4,200.
And while some proponents of the yellow metal, such as Peter Schiff, celebrate the fresh peak and envision a further rally in the short term, others predict it might be time for a pullback.
One of those is the popular X user Crypto Rover, who warned that gold’s Relative Strength Index (RSI) has exploded to 91.8, or the highest level since the early 80s. The technical analysis tool measures the speed and magnitude of recent price changes to help traders spot potential reversal points. It varies from 0 to 100, and anything above 70 indicates that gold’s valuation has spiked too quickly in a short period of time, meaning it could be due for a short-term correction, or, as Crypto Rover suggested:
“This means it’s insanely overbought, making a cooldown likely.”
The analyst assumed that such a development could prompt investors to start reallocating funds back into Bitcoin (BTC), thus possibly setting the stage for its next big move.
BTC’s Bull Mode Remains Intact?
There are many other analysts on crypto X who believe BTC’s bull run is far from being over despite the recent market crash. The analyst, who uses the moniker BitBull, for instance, claimed the leading digital asset continues to trade in a “giant bullish channel” and as long as the $100,000 – $103,000 holds, the bears can’t prevail.
For his part, Carl Moon noted that a red October is something highly unusual for BTC. That said, he urged investors to “buy the dip” while they still have the chance.