Bitcoin (BTC) In ‘Autocorrelation Hangover’ Mode: Mike McGlone

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As a researcher with a background in commodities and financial markets, I find Mike McGlone’s analysis intriguing and thought-provoking. The Senior Commodity Strategist at Bloomberg Intelligence presents a compelling argument that Bitcoin’s recent underperformance against gold could be an “autocorrelation hangover.”

As a researcher at Bloomberg Intelligence, I’ve been closely monitoring the relationship between Bitcoin and gold. According to my analysis, Bitcoin might be currently dealing with an “autocorrelation hangover.” This term refers to the tendency of a time series to exhibit correlation with a lagged version of itself, which can impact short-term price movements. The 100-week moving average of gold against Bitcoin, as depicted in our recent chart, supports this theory.

As a senior commodity strategist, I believe that the correlation between Bitcoin and gold might offer valuable insights into the larger market dynamics.

Gold’s Record-Setting Month

In May, gold set yet another monthly record high, indicating its potential for surpassing the returns of stocks and other investments. This remarkable showing might provide valuable clues about the current state of market conditions and the relative robustness of different assets.

The term “Autocorrelation-Hangover Time” can be paraphrased as “the persisting impact of past correlations between prices.” In the given context, the article discusses the exceptional performance of gold in May and its potential influence over its continuing outperformance against stocks and other assets. Meanwhile, Bitcoin, born during the aftermath of the financial crisis, has been a standout performer and leading contender within the investment world.

— Mike McGlone (@mikemcglone11) June 3, 2024

The price of gold experienced a noticeable increase between April and May, contrasting the downward trend observed before the Federal Open Market Committee (FOMC) meeting in late April. Gold’s value dipped as low as $2,300 per ounce during this period. Furthermore, this shift in gold’s price had a ripple effect on Bitcoin, causing it to decrease to around $60,000.

As a crypto investor, I’ve noticed an intriguing development in the gold market. In May, we saw a significant surge in gold prices. Some experts believe that this rally was driven by individual investors seeking refuge in gold as a hedge against rising inflation and uncertain economic conditions. In simpler terms, they were looking to protect their wealth from potential losses caused by these external factors.

As an analyst, I’d rephrase it this way: Back in the early part of the year, Robert Kiyosaki, the well-known author of “Rich Dad Poor Dad,” recommended investing in Bitcoin and gold as a savvier financial decision. The uptick in adoption during April and May appears to indicate that many investors followed his advice.

Bitcoin Performance Since The Great Recession

Coming out of the Great Recession, I’ve witnessed Bitcoin’s remarkable resilience and significance as a market trendsetter. The digital currency experienced an extraordinary bullish surge, reaching new heights with its All-Time-High (ATH) of over $73,000, which I was fortunate enough to observe in March this very year.

According to McGlone’s assessment, recent events such as the introduction of spot Bitcoin ETFs and the first-half year’s bitcoin supply reduction through halving have led to a noticeable weakening in the relationship between Bitcoin and gold. He argues that Bitcoin’s underperformance might indicate emerging hurdles for its robust growth.

I’ve analyzed McGlone’s statement and noticed he didn’t mention any specific reasons for Bitcoin underperforming against gold this year. Some observers, though, believe the cryptocurrency market’s volatility could be a significant factor. Despite these challenges, there remains optimism that Bitcoin will experience a bullish trend by the end of the year.

At the time of writing, BTC price has soared by 1.47% to breach the $70,000 mark.

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2024-06-03 17:59