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Bitcoin to continue outshining Gold In 2024Bitcoin (“BTC”) – the millennial gold - continues to outshine traditional gold. BTC prices have climbed higher after the listing of spot ETFs. A wider bull rally in the cryptocurrency markets is also underway. ETH touched its highest level since 2022. The total cryptocurrency market cap is 14% higher YTD. A diverging outlook between BTC and Gold is emerging. After reaching all-time-high in December 2023, gold prices have pulled back this year. Stronger dollar fuelled by delayed rate cut expectations are taking shine off gold. Halving event and bullishness from spot ETFs make for shining prospects ahead for BTC. In sharp contrast, macro backdrop dragging gold down leading to potentially lacklustre price performance. Collectively, this makes for a compelling spread positioning comprising long BTC and short Gold. BTC RALLY HAS MORE STEAM BTC is 12% higher YTD. It has marched higher with solid momentum post the spot ETF launch. Multiple factors point to further gains in store. For one, sustained net inflows to spot ETFs signal strong demand from US investors for BTC. Volumes in spot ETFs reached its highest level since its launch on 21 February 2024. Participation was broad across several investors with 32,000 individual trades (sixty times the average), indicating widespread demand across investors. BTC halving is due in a little less than a month, fuelling additional bullish sentiment. Lower supply of newly mined coins is expected to drive prices even higher. BTC is currently trading 15% below its production cost, calculated by Capriole Investment using power consumption figures from the Cambridge Bitcoin Electricity Consumption Index . This index has served as a strong price floor over several years. Miners are unlikely to sell their BTC holdings below their cost of production, consequently reducing selling pressure below this key support level. While BTC production cost acts as an indicative support level, BTC may continue to trade below this level. For one, miners have built up BTC holdings over the past year, which they can opt to sell for a substantial profit below the new production cost. The surge in BTC over 2023 has started to spill over to other digital assets. A broader digital asset rally is under play with ETH retesting its highest level since 2022 this month. The potential for further appreciation in BTC is high if markets are currently at the cusp of a wider crypto rally. Finally, traders have been avoiding substantial short positions. As Bitfinex highlighted , the short-squeeze ratio is lower this year, compared to previous years which suggests large whale investors have not been taking substantial short positions. However, institutional positioning in CME BTC futures paints a contrasting picture. Asset managers have built up record long positioning while leveraged funds have built up record short positioning on CME BTC futures. DELAYED RATE CUTS TAKING SHINE OFF GOLD Delayed rate cut expectations have led to a resurgence in the dollar causing a pull-back in gold prices. Gold faces a double whammy in terms of asset rotation as both equities and the dollar remain strong. RECESSION IS OFF THE CARDS Mint Finance described gold performance during recessions and soft-landings in a previous paper . In summary, while gold prices rally sharply during recessions, performance is flat during soft landings, a situation where inflation subsides, and economic growth remains resilient. Over the past two soft landings, gold delivered flat returns. While a soft landing is yet to be realized as both inflation and rate outlook for 2024 remains uncertain, a recession in the US has become a remote possibility. In fact, the Consumer Board has abandoned its long-running call for a recession in the US. Consumer Board’s (“CB”) Leading Economic Indicator (LEI) signals turning points in business cycles and near term economic outlook. Since July 2022, the LEI signalled a US recession with the LEI in decline. LEI fell to 102.7 in January 2024, its lowest level since 2020, yet CB has stated that it no longer anticipates a recession in the US. CB still anticipates a slowdown this year with growth expected to be near zero in Q2 and Q3. Yet several LEI components have turned positive over the last six months, including equity performance. An overly hawkish Fed makes the much expected Fed pivot less likely, for now, but the strength in the broader economy across businesses and consumers makes a slowdown unlikely. FUND FLOWS – TALE OF TWO ETFs Fund flows for BTC and Gold ETFs also suggest a vastly diverging picture. Investors have responded exceedingly well to spot ETFs. Cumulative flows for spot ETFs have exceeded USD 3 billion in a month. For reference, it took GLD - the first Gold ETF - two years to get to this point. Though, as a counterpoint, the ETF market and money supply are much larger now compared to when GLD was launched. Net fund flows for BTC ETFs were close to zero for the first few days after launch as GBTC outflows shifted towards lower-cost ETFs. Since February, inflows to spot ETFs (excluding GBTC) have accelerated while GBTC outflows have slowed. The result is sharp growth in net inflows suggesting strong and positive investor response to spot ETFs. Data Source: TradingView and ETFDB While BTC Spot ETFs has been enjoying consistent net inflows, Gold ETFs have been awash with fund withdrawals and redemptions. Data Source: TradingView Contrasting cumulative net flows into BTC ETFs & Gold ETFs shows a stark divergence in expectations ahead for the price of these two similar assets. Data Source: TradingView and ETFDB Outflows from gold ETF’s represent asset rotation out of gold with some of those assets going towards equities and bonds. HYPOTHETICAL TRADE SETUP An unfavorable macro outlook is weighing on gold while BTC faces a positive outlook with tailwinds likely to push prices higher. A position combining a long position in BTC and a short position in Gold benefits from both rising BTC and falling gold prices. This spread does not compromise on performance as past rallies have yielded similar performance in the BTC/Gold ratio. BTC/Gold spread has not been an effective hedge as the ratio does not perform better during downturns. A hypothetical spread trade consists of long four lots of Micro Bitcoin futures (MBTH2024) and short one lot of Micro Gold futures (MGCJ2024). This position requires margin of 4 x USD 1,120 (=USD 4,480) on the BTC leg and USD 830 on the gold leg: • Entry: 25.32 • Target: 30.60 • Stop Loss: 21.30 • Profit at Target: USD 4,310 • Loss at Stop: USD 3,285 • Reward/Risk: 1.3x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Editors' picks
CME:BTC1!Long
by mintdotfinance
6
Gold Bear Case - Wyckoff Distribution Pattern - Posting for funThis chart is for entertainment purposes only and setups up a possible bear scenario. I'm not an expert at distribution patterns but I thought it would be fun to see if this might fit the pattern. I don't think gold is excluded from the 'everything bubble' that the Fed is trying to pop. The Fed has been very clear that interest rates are going to go higher and stay higher for a long time. Gold does not yield interest payments and so people are going to put their money in things that do (e.g. treasury bills paying 4-5% for a low risk return). I would not be surprised to see a large correction in gold to prices below or at $1k. I'm neither bearish or bullish on gold. Enjoy.
FXOPEN:XAUUSD
by XYZ-Trader-
BITCOIN - Greed Is In the Air With Bearish Signs of ReversalI'm watching the market cautiously at the moment. BTC is up almost 50% since its last low in December without even a 6% correction. We have had 5 consecutive higher highs, but the MACD has conversely made all consecutive lower highs. Taking a look a previous times this has happened in 2022, we had precipitous drops. Volume is also decreasing despite making higher highs. I am not sure how much more this run has left, but the risk reward favors the downside to me. Given the Fed's announcement, there is a lot of excitement in the air. With BTC pumping and holding over $20k for 2 weeks now (on bearish news of increased US regulation on crypto and the Genesis bankruptcy announcement no less), it's seems ripe for a rug pull. $21k is the first support level I would look to see how the bulls respond if we dip. But that is only the .382 Fib retracement level and BTC loves the .618 which would be $19,300. That is quite the correction. This run may hit $25,000, but it may not. Erring on the side of caution and history, I think BTC will likely test $20k-$21k before it moves on to $30k, so I'll be waiting for the correction. Trade cautiously.
COINBASE:BTCUSDShort
by jpbrown1023
Bitcoin vs GoldPlease 1st of all click the boost🚀 button if you want me to post more ideas and follow me to support my work! It's absolutely for free. This is comparison of Bitcoin (BTC) versus Gold (XAU) , so if the: *price is going up, it means BTC is stronger than XAU *price is going down, it means BTC is weaker than XAU After strong initial impulse down the pair has been consolidating for almost 5 months and formed this triangle📐. Now the price is breaking down out of this triangle and if it really breaks, I think there is chance for drop to 7.5. TARGET being height of the triangle projected from midpoint of the local range (pink). So this call is predicting that Bitcoin will lose -30% against the Gold . As you know recently it was a total carnage for crypto market because of the FTX fail. Actually I predicted this FTT extreme drop 2 months ago in the idea down below: The current situation between Binance and FTX being also a reason why I think the investors will move the funds from crypto to precious metals - safe haven. Let me know your thoughts! Check my other stuff in related ideas. Please boost🚀, comment🗣️, follow me✒️, enjoy📺! ⚠️Disclaimer: I'm not financial advisor. This is not a financial advice. Do your own due dilingence.
BITSTAMP:BTCUSDShort
by bizmark
9
BTC manipulation at its max.As i have stated yesterday about the btc prices been bearish. BITSTAMP:BTCUSD as you can see the price movement yesterday was ridiculous, tricking many, many people going into long positions. the buy volume was so little but with a massive green candle is corporate funds exiting the position after jacking up the price for retail investors. Dont fall for it next time when you see little buy volume with a large green candle. we are still on track for the short position i have stated yesterday at the 23233 area when it breaks we trade.
BITSTAMP:BTCUSDShort
by ciythex
Bitcoin support resistance in gold terms.There is confluence with the idea that we could see BTCUSD visit $16K levels (twitter). If that is the case, I would say high 16s would be the target. Possibly with a longer and fast wick mid 16s are plausible. But anything slower would breach the 300gr level ($16.6K at the moment) which would let the next level come into play. That is the 200gr level ($11K at the moment). When looking at this idea, the mentioned USD levels aren't important remember those fluctuate as the price of gold changes. So, we would be looking for the $16k and $11k support levels to shift upwards or downwards.
BITSTAMP:BTCUSD
by yalla-yalla-habibi
Gold vs BTC, which one will make the next move? XAUBTC is one of my favorite indicators to decide if bitcoin's big crash or big pump is over! The rivalry between GOLD and BTC is worth watching and being careful about. It seems that bitcoin will suffer a little more depreciation against gold and will lose more value until it reaches the next resistance zone, I mean between 0.1 to 0.11. After the touch and a few days of range on the area, either the red or the green scenario is going to happen and it's too soon to talk about it. But in the case of the green scenario which leads BTC to gain value against gold, I'm expecting a sharp reject because there is no obstacle to reaching 0.06 on the chart and it means a nice pump for the bitcoin. DO YOUR OWN ANALYSIS. DO NOT FORGET MONEY MANAGEMENT.
TVC:XAUBTCShort
by bhnmzm
Bitcoin to Gold - Expect the top in 5 months not 5 weeks!Trying to make sense of Bitcoin's move, we should probably look at Bitcoin to Gold chart. Why? I think US Dollar has lost it's credibility as unit of account due to massive amount of newly printed dollars. Bitcoin to Gold shows an ascending triangle taking shape at the moment. Now the question is how we can predict when we will see the Bitcoin's top for this bull market cycle (halving cycle). If bitcoin follows the same pattern that is followed in late 2017, we should see the top in 5 weeks (end of Dec 2021 or early Jan 2022), but it has played out differently this time and there are some factors to consider. The last cycle was fuelled by retail investors, but this cycle's drive is mainly institutional investors, which I believe they are delayed in entering the market and might take few months to see FOMO in institutional level. So this time we might see the top around May 2022. What news will cause the market crash? Probably Mt Gox bitcoin distributions. The top for this cycle, could be around 100oz Gold which might be around 200k-250k USD. I believe in the next cycle we will see the governments and central banks competing to get their hands on enough Bitcoin to not to lose their power. We can see USD $1 million in the next cycle top. Yes. Bitcoin will become a global currency with $20 trillion dollar market cap by 2026 and we will see other countries copy El Salvador's move in making Bitcoin legal tender. Back to the topic, here is the prediction. We sill see the top in this cycle around May 2022 due to the nature of decision making in companies which is more time consuming than the decision making process by retail investors. and we will see bitcoin hits 100oz gold per 1 BTC.
BITSTAMP:BTCUSDLong
by Mohandes
1
ETH may be starting its catch up runEthereum usually follows the movements of Bitcoin. However, in the last 18 days, Bitcoin has had a massive run while Ethereum has stayed proportionally behind. BTC has gone 75% over is previous ATH while ETH remains 45% under its ATH. Suppose we are about to see a catch up run like in 2017. The gold denominated resistances are 20grs and 33grs. At current prices that is $1,220 and $2,013 respectively. A run for the 2,000 dollars area could take the ETHBTC pair above the channel it's been for two years. The idea of using resistances denominated in dollars-per-grams-of-gold is to account for the depreciation of the dollar.
BITSTAMP:BTCUSDLong
by yalla-yalla-habibi
BTCUSD / GOLD ratio... a different perspectiveOf late, I came across a lot of coverage on the BTCUSD ratio with Gold, and there are apparently much expectations that BTCUSD is going to explode, as previously. So... I thought I ought to take a look at it myself and see what it can figure out. The chart shows it... initially, it looked very much like the BTC/Gold is about to break out and give BTC a huge rally like before. But somethings didn’t look quite the same, so outcome may differ. First up, the trend lines drawn appear that there is likely to be a breakout. I have little doubts about that. But the first thing sus about this is the MACD... it has a different profile from 2017 and 2019. This brings me to the second point. Here we see the orange line, superimposed Gold price. In 2017, Gold prices were steady while BTC rocketed. In 2019, MACD was supportive even as Gold prices was rising, but BTC rose relatively more. In 2020, however, the imminent breakout appears to be due to a slight increase in BTC, but a major drop in Gold prices... which by the way, brings the denominator down, hence, ratio increases! Good to know, good to watch, good to be ready nonetheless... Bullish on BTCUSD in the very long term, but need to be very patient, and decisively act when necessary. But for now, it’s sus...
COINBASE:BTCUSD
by Auguraltrader
1