BTC rate drops down. Bitcoin's correlation with Gold is at a record level

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After yesterday's decline by over USD 700, the BTC rate fell to the lowest level in a week to around USD 11,200. Currently, the price of BTC is $ 11,512.

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BTC price down by4%

After Bitcoin (BTC) hit its highest weekly close in two and a half years, on Monday it rose above $ 12,000 for the second time this month, reaching its highest level this year. Yesterday, however, it rejected this important resistance level once again, plunging more than $ 700 and slipping below $ 11,200.

Ultimately, Bitcoin ended yesterday with a relatively large decline, losing around 4.1%. At the end of the day, the cryptocurrency was trading at $ 11,411. Currently, the BTC exchange rate is around USD 11,512.

BTC rate: analysts and traders' speculation

As analyst Ray Salmond points out, Bitcoin saw a sharp correction shortly after gold and other precious metals saw their first sharp drops after months of gains.

As we wrote earlier, last week the price per ounce of gold surpassed $ 2,000, reaching an all-time high, then dropping below $ 1,900. "The last two days have seen the biggest drop in seven years," writes Bloomberg.

The correlation between gold and "digital gold" is a frequently debated topic among analysts. According to research firm Skew, these assets are now more correlated than ever before.

The company's data shows that the monthly correlation between the leading cryptocurrency and the gold ore reached a record level. Such a high correlation lends credence to the narrative that Bitcoin is a storehouse of value in times of economic uncertainty and mass printing of money, adds Skew.

Despite the decline, investors remain optimistic. As analyst Joseph Young writes, "Many traders seem to expect the price to remain in the $ 10,500 to $ 12,000 range."

Andrew Tu, director of Efficient Frontier, says the temporary slump in the BTC market will not last, despite falling prices. "If the market faced exhaustion, we could see a bigger correction" he said. However, the positive changes in the market will ultimately bring further growth, Tu believes. "With all the positive news about Bitcoin, as well as the recent altcoin pumps, it's clear that market sentiment is very positive."