“Bitcoin and gold, the dynamic duo of alternative investments, poised to outshine traditional stocks in November as key indicators point to a bullish rally.”
Bitcoin (BTC) and Gold (XAU) have been making headlines recently as both assets continue to hold strong. Bitcoin is holding firm at the $34,000 support level, while Gold has cleared the $2,000 milestone. These price movements come at a time when the US stock markets are experiencing a downswing due to underwhelming earnings reports from major tech companies like Google and Facebook.
One interesting indicator to note is the correlation between Bitcoin and Gold prices. A historical analysis reveals that when the correlation coefficient between the two assets nears 1 during a bull market, investors tend to increase their bets on Bitcoin. This is because Bitcoin has the potential to deliver higher profit margins. In fact, the last time the correlation coefficient reached 1, Bitcoin price rapidly gained 23% and hit a new 2023 peak within 10 days.
Given the current negative circumstances in the stock markets, investors are piling buying pressure on Bitcoin and Gold simultaneously. This suggests that the momentum for both assets could increase in the coming weeks. Already, Gold has reached a 5-month high by clearing the $2,000 milestone.
If history repeats itself, investors can expect Bitcoin price to start November positively and potentially reclaim the $40,000 milestone. This could make Bitcoin and Gold outperform stocks in the coming month.
Overall, these recent price movements and correlations between Bitcoin, Gold, and the stock markets indicate that alternative and non-correlated markets are becoming increasingly attractive to investors looking to diversify their portfolios and mitigate losses. As we head into November, it will be interesting to see how these trends continue to unfold.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Nasdaq, Inc.
