Gold is stealing the spotlight from Bitcoin

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The Role of Gold

To be honest, starting from the first of October, a mini-mini-bubble began to inflate on the price of Bitcoin, which theoretically could have also inflated and perhaps transformed first into a real mini-bubble, and then even into a large bubble, like the one at the end of 2017. 

However, none of this happened. 

It should be noted that when a bubble inflates on the price of Bitcoin, there is no correlation that holds until the bubble bursts. This time, however, it was different. 

Not only was the mini-mini-bubble already evident even before it turned into a real mini-bubble, but in the almost total absence of FOMO, it was indeed possible to imagine that it would end up bursting soon. 

To all this was added the new gold rally, which started particularly on Monday, October 6th. 

In fact, on October 7, when the Bitcoin mini-rally at the beginning of the month ended, the gold rally could have stopped as well, but it continued. In fact, yesterday it accelerated, so much so that the price of gold has been rising abnormally for more than a week now. 

All this might have temporarily drained capital from the Bitcoin market. 

The Mini Gold Bubble

At this point, however, there are signals indicating that a mini speculative bubble might have inflated on the price of gold. 

Everything seems to have started after surpassing $4,000, because on October 9th the price appeared to have begun a slight decline, which, however, had already ended the following day. 

Just on Friday the 10th, while the crypto markets were experiencing a crash, a mini speculative bubble seemed to be inflating on the price of gold, with its price seemingly destined to return to $3,900 per ounce, but instead it began to rise towards $4,100.

Now, in fact, the hypothesis of a possible correction of gold is starting to circulate, perhaps next week, which could also be interpreted, should it actually occur, as the bursting of the current mini-bubble. 

Generally, mini-bubbles last a short time (one or two weeks), and when they burst, they simply bring prices back to where they started. As for the current possible mini-bubble on gold, it started from around $3,950. 

In the event that this mini-bubble in the gold price actually bursts, the capital exiting this market could also flow back into Bitcoin.