Bitcoin's golden correlation rises to historic levels, signaling a potential bull market start.

Author: Benson Sun (@BensonTWN)

During the week of August 22, BTC surged 24%. The market was abuzz with discussion: Has the bull market arrived? Many, however, remained skeptical.

First, the conclusion: I believe what’s coming is not just a bull market, but a major-level bull market.

Bitcoin's golden lineage has fully awakened

Let’s start with something very unusual.

In the same week that BTC surged, gold rose 5.6% and Nasdaq fell 2.1%.

Over the past few years, many have treated BTC as a high-beta tech stock: when U.S. equities enter risk-on mode, BTC surges; when U.S. markets tighten liquidity, BTC typically declines even faster.

But this time, the move was different: after August 17, both BTC and gold strengthened simultaneously, while Nasdaq remained unchanged.

In fact, since May, the 60-day correlation coefficient between BTC and gold has surged sharply, peaking at 0.636, nearing its historical high of 0.64 in November 2020 (with a long-term median of only 0.12). Meanwhile, the correlation coefficient between BTC and Nasdaq has steadily declined, reaching a low of 0.13, and has since rebounded to 0.22.

How rare is it for the orange line to touch 0.5? Since BTC trading began, only 2.2% of trading days met this condition. Prior to this cycle, it had only occurred twice in history: in August 2020 and October 2022.