Bitcoin logged double-digit gains in October, beating gold for the first time since June.
Cryptocurrency world by market value ended last month with a gain of 10.26 percent, snapping a three-month, according to data Bitstamp.
Meanwhile, gold rose just 2.74 percent in October, after falling 3.17 percent in September – the biggest monthly decline since June 2018.
Bitcoin make profits for five consecutive months from February to June – the longest winning streak since August 2017.
Gold, however, the losses registered in February, March and April. The yellow metal commit 1.7 inches higher and 7.9 percent in May and June, respectively, despite the meager profits compared with bitcoin is 62 percent and 25.89 percent increase in the same month.
While BTC gold outshone by a large margin in the five months to June, the tide turned yellow metal supports in the third quarter.
Bitcoin down 6, 4 and 13.5 percent in July, August and September respectively. Experts associated with the sell-off regulatory concerns Libra fast-tracking up to cryptocurrencies in general, overbought technical conditions and other factors.
Gold rose 0.23 per cent and 7.65 per cent in July and August, respectively, as the market priced in the high prospects of aggressive monetary easing by the US Federal Reserve and other major central banks amid growing China-US. trade tensions.
The metal fell 3.17 percent in September, but the decline is restrained compared with double-digit BTC sell-off.
Looking ahead, gold may underperform bitcoin in November, as optimism ahead of U. S.-China trade can reduce haven demand for the metal.
Subsequently, on 31 October, the Fed hinted that it would stop rate cuts to assess the incoming data before considering lower borrowing costs again, partly because of the potential easing of trade tensions, according to The New York Times. Gold, zero-yield assets, usually cheers dovish Fed policy and face selling pressure when the central bank pause signal or the rate of increase.
Meanwhile, positive seasonal for bitcoin – cryptocurrency have acquired in November in six of the last eight years. More importantly, BTC tend to take a strong bid six months ahead of halving the mining reward, according to historical data. Events halving the next one is due in May 2020.
Moreover, the ongoing rally in US stocks may bode well for bitcoin. “Before bitcoin bull run which is characterized by a gradual decline in the volatility of the equity markets. For example, we have noted it, though not perfect, inverse correlation with the VIX index over a longer time horizon (ie 2017 run-up), “analysts at DelphiDigital wrote in their monthly reports.
The S & P 500 recorded a record high of $ 3066 on Friday and the bull market is expected to continue on the back of three major buyers – companies, foreign investors and US households – according to Goldman Sachs.
Bitcoin technical chart is also bullish bias, as seen below.
Daily, three-day and monthly charts
BTC is currently changing hands at $ 9170 on Bitstamp.
Prices jumped 28 percent in the three-day 27th Oct (on the left), with a trade volume reached its highest level since February 2018.
In addition, the latest pullback from $ 10,350 to $ 9000 is accompanied by a decrease in volume. A low volume pullback is often short-lived. 200-day MA has limited downside since October 30 (on the left).
All-in-all, the path of least resistance seems to be on the higher side and the prices look set to revisit the resistance at $ 9,600 and $ 10,000.
Will weaken the bullish case if the 200-day MA at $ 9106 is violated downwards. It will validate the bearish view put forward by the fall MA 5-month high at $ 9268 (top right) and is likely to produce a big drop to $ 8,500.
Note that, BTC repeatedly failed to maintain the advantage over the 5-month MA over the weekend. Bulls, therefore, need to progress quickly.
Disclosure: The author does not hold cryptocurrency assets at time of writing.
Bitcoin image via Shutterstock; charts by Trading View