Bitcoin Rallied 172% and 350% After Its Last Gold Correlation Spikes: Will History Repeat?

Bitcoin’s (CRYPTO: BTC) 90-day correlation with gold has hit an all-time high, matching two prior spikes that each preceded massive Bitcoin rallies of 172% and 350%.

What the Bitcoin-Gold Correlation Is Saying?

According to The Block, Bitcoin’s 30-day metric reached a yearly high of 0.8, meaning the two assets are moving together more closely than at any point on record. 

That matters because the same pattern has appeared twice before and both times preceded massive Bitcoin rallies.

In Q4 2020 the correlation spiked to 0.6 before falling, and Bitcoin gained 172% in the months that followed. 

In Q4 2022 it climbed from near zero to 0.5, and Bitcoin rallied nearly 350% over the next 14 months. Both times the real bull market started when Bitcoin decorrelated from gold after the spike, not during it.

The institutional flow data reinforces the debasement trade narrative behind the correlation.

Both Bitcoin and gold ETFs sit in the top 10 by inflows, with Bitcoin ETFs drawing nearly $1 billion last week. BlackRock’s IBIT (NASDAQ:IBIT) leads all individual products with $1.2 billion in year-to-date inflows.

What the Fear and Greed Index Shows

The Block noted that the Fear and Greed Index sits at 68, firmly in greed territory, after touching a low of 5 earlier this year in extreme fear.