Not many traders know, that market participants such as banks, big institutions, fund managers, and big companies trust bitcoin as a safe-haven, which actually competes with gold . When is too high, market participants will move their money between bitcoin and gold .
So this is one of the reasons why gold falls when is too high. We can clearly see from the short-term chart above, that gold is but bitcoin is , and vice versa, the unidirectional correlation between bitcoin and gold . However, when the USD is optimistic about strengthening, both will be equally . It can be concluded that both are the same as hedging asset. Also, we can use data from CFTC and LME to know gold and crypto sentiment and correlation. Coinbase and JPMorgan can also be considered. But I’ll discuss this separately in the next explanation.