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Given the pre-Internet era, television or newspapers were the only reliable source of information. These media were far-reaching, but their origin was limited. The world is at our fingertips with the computer and the Internet at our disposal. And if there was a way to achieve a transaction that does not require the use of trusted intermediaries and a direct peer-to-peer transaction? A Blockchain is introduced, which is an incorruptible numerical register of economic transactions that can be programmed to record not only financial transactions, but also virtually anything of value.
A cryptocurrency is a digital asset designed to work as a means of exchange that uses powerful cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets.
The most popular crypto-currencies are Bitcoin, Ethereum, XRP, Iota, Cardano, Tron, Ripple, Monero, Litecoin and Stellar.
Crypto-currencies such as bitcoins have innumerable advantages over existing substitutes such as,
1. They are decentralized and run on a distributed public database that contains and an encrypted ledger.
2. They provide a transparent public transaction record, that is, in the Bitcoin system, each transaction is made public and stored in blocks, which turns out to be a part of the blockchain.
3. Bitcoin is inaccessible because of its basic description.
Bitcoin traders (BTC) could be informed of an apparent negative correlation that has developed between the price of bitcoin and that of gold.
Gold posted a strong offer at $ 1,196 on November 13 and jumped to $ 1,300 on January 4, likely due to a massive sell-off in the US dollar. The greenback was down against most currencies in the last two months of 2018, due to growing speculation that the Federal Reserve (Fed) could reduce or pause rising interest rates. interest in 2019.
Bitcoin, however, did not take advantage of this widespread sale on the dollar. Crypto-currency saw a bear market rebound with a convincing move of less than $ 6,000 on November 14 – a day after gold found buyers close to $ 1,200 an ounce.
This price action indicates that the two assets are inversely correlated. The validation of this argument is the 90-day correlation coefficient of -0.593. The statistical measure ranges from -1 to 1, with a negative number representing the inverse relationship between the two variables, while a positive number implies a direct correlation.
As a result, the next evolution of gold prices could affect the main cryptocurrency currency depending on the value of the market. Currently, the safe haven is trading at $ 1,285, after reaching its lowest level in three weeks, at $ 1,276 earlier this week.
Meanwhile, BTC is trading in a narrow range exceeding $ 3,500 for the 13th consecutive day. The extended consolidation period could end with a strong uptrend if the corrective gold withdrawal worsens.
It should be noted that the correlation is not a causal link and only describes the relative change of one variable when changing another.
Gold and Bitcoin Chart
As seen above, bitcoin and gold have moved in opposite directions since the end of November.
Gold gained 8.33% in seven weeks before January 4th. At the same time, Bitcoin has depreciated by 50%.
In addition, the repeated failure of gold at $ 1,300 has established this psychological level as resistance in the short term. Meanwhile, Bitcoin has been fighting for $ 3,500 since January 11th.
Crypto-currency could see a strong bullish movement if the withdrawal in the yellow metal accelerates.
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