Is there a correlation between Bitcoin and gold, how realistic is it to make money on this relationship?

Trading using correlation, due to its simplicity, has long become a favorite strategy of many traders.

After all, there is nothing easier than choosing assets with a stable correlation, determining whether this relationship is direct or inverse, and then only catching the moments when the price of one of the pairs begins to change sharply.

Currently, the most interesting asset for such a strategy is Bitcoin, since, unlike classic exchange assets, it can also be traded on weekends.

That is, if there is a correlation between it and, for example, gold, then in practice this property can be applied as follows.

Let’s assume that the price of Bitcoin fell to a record low during the weekend, and there is a direct correlation between it and gold, this means that with the start of trading on Monday, the price of the precious metal will also go down and you can open trades for sale.

It remains only to find out what correlation exists between Bitcoin and gold and whether it exists at all.

First, let's analyze the current situation on the 4-hour chart of XAUUSD and BTCUSD (gold/dollar and bitcoin/dollar):

Looking at the charts, we can say that for two months there has been a direct correlation between gold and Bitcoin. That is, if Bitcoin becomes more expensive, gold also becomes more expensive, and vice versa, when the price of gold falls, Bitcoin also becomes cheaper.

But not everything is so simple here; for example, let’s take another time period on the same time frame:

This time the situation is completely opposite, and we can already talk about an inverse correlation between the XAUUSD and BTCUSD pairs.

If we analyze the situation as a whole, we can say that in most cases there is still a direct correlation between gold and Bitcoin.

Experts express a similar opinion, citing a correlation coefficient of +0.7, which is a fairly high figure. That is, in most cases, gold will follow Bitcoin.

And if bitcoin collapsed over the weekend, then with a high probability the price of gold will collapse on Monday.

Based on this pattern, you can build a simple and quite effective trading strategy, because you don’t often come across assets with similar properties. It should not be forgotten that there may be other scenarios of events; the correlation is not 100%.