At a basic level, the two assets are considered as vehicles for the storage of value. Additionally, both are interchangeable and divisible. Most importantly, bitcoin and gold have limited supply; a property that makes both assets attractive to investors and speculators.
Recently, a popular cryptocurrency trader revealed a far more striking similarity between the two assets, a similarity that derives purely from human psychology and bodes insanely well for the current bitcoin price boom.
This Gold Price Chart Is Ridiculously Bullish for Bitcoin
King Cobie posted an image in a tweet that illustrates the massive resemblances between the price charts of gold and bitcoin.
The similarity is so obvious that the pseudonymous analyst – whose account has accrued more than 160,000 followers since its creation during the 2013 bubble – only needed to write “Sir” as the caption.
From the perspective of a technical analyst, the similarity is undeniable:
One key difference between the two charts is the timeframe. The trader tweeted gold’s monthly chart while it was the daily chart for the leading cryptocurrency.
There’s a simple reason for this, as another user noted: The process appears to be expedited for bitcoin due to technological advancements.
The Crucial Question: Where Is Bitcoin Right Now?
We are putting stock in the resemblance between the two charts because human behavior tends to be predictable.
One of the tenets of technical analysis is that history repeats itself. Thus, if you see similar patterns from two different assets, it is highly likely that these assets will have the same end result.
This begs the question: Where is bitcoin right now compared to gold’s market cycle?