Gold-BTC Correlation: Trump-Biden Swing Period + Holiday Rally

11月27日

With Donald Trump's recent election victory, global markets are immersed in growing political uncertainty. Investors, accustomed to the volatility that characterized his previous term in office, are beginning to recalculate their investment strategies. In this climate, safe-haven assets such as gold (Ticker AT: GOLD) are once again an attractive option. Gold, historically perceived as a safe haven from geopolitical and economic risk, could be boosted by this uncertainty. Investors, seeking safety, could increase their positions in the precious metal, especially if markets anticipate a more unstable economic scenario under a Trump presidency.

Gold's all-time high is at $2789.89, and currently, the trading zone is between $2641 and $2604. Gold's point of control (POC) is located near $2700, indicating a long-term bullish range. However, currently, the price is at the bottom of the channel, which could suggest a possible bounce or further consolidation at this level.

On the other hand, Bitcoin (Ticker AT: BTCUSD), which has emerged in recent years as an alternative to gold, could experience a different dynamic. Although not as closely tied to politics as gold, BTC could benefit from expansionary monetary policies. With the Federal Reserve keeping interest rates at low or unchanged levels, Bitcoin is perceived by many as a hedge against inflation, and a digital safe haven from expansionary fiscal policies. In this sense, investors could see Bitcoin as an opportunity to diversify and protect their capital, which could lead to an increase in its demand.

Bitcoin's all-time high was reached at $99,733.21, and its latest trading zone is between $93,811 and $84,568, with a checkpoint (POC) located at $90,853. Bitcoin's structure remains predominantly bullish, indicating that the asset continues to show upside potential. Against this backdrop, BTC is likely to continue its ascent, especially if investors seek refuge in non-traditional assets, such as cryptocurrencies, in the face of a low rate environment and expansionary policies.

At the same time, the start of the Christmas rally is driving activity in the financial markets. Traditionally, this period is marked by a surge in investment flows, with many seeking additional returns before the end of the year. Gold could benefit from this trend, attracting those who prefer stability and safety during this highly volatile phase. However, Bitcoin, with its more speculative nature and ability to generate large returns, could capture the attention of riskier investors, looking to take advantage of rapid market movements.

As for the relationship between the two assets, the correlation between gold and Bitcoin has traditionally been weak, but in times of economic crisis or political uncertainty, they could move in similar directions. Both assets, while different in nature, share a common appeal in an environment of low rates and rising government debt. The perception that both gold and Bitcoin act as safe havens against inflation and the depreciation of traditional currencies could cause both to experience a simultaneous boost.

However, at other times, they could move inversely. While gold would benefit from an environment of political and economic uncertainty, Bitcoin could stand out if investors believe that expansionary monetary policy will be more beneficial for cryptocurrencies in terms of increased demand for non-traditional assets.

In conclusion, the behavior of gold and Bitcoin in this context will depend on how investors perceive the risk associated with Trump's presidency and the Fed's decisions. In a scenario of high uncertainty and expansionary policies, both gold and Bitcoin could see an increase in demand, although each could be favored by different factors. The dynamics between these two assets could reflect not only a search for safe haven, but also a long-term bet against an unpredictable economic future.
Ion Jauregui - ActivTrades Analyst







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