Bitcoin has been in a daily downtrend for the last two weeks and most news headlines have been talking about how Bitcoin is definitely not a safe-haven because it hasn’t been able to recover while Gold was seeing higher highs every day.
Now, Gold has been hit hard as well as the Coronavirus fears intensify. The recent Gold crash is the biggest loss since 2013 and also throws some cold water on the idea that a safe-haven will always react positively in the face of economical adversity.
Bitcoin, on the other hand, has been trading sideways for the past 4 days between $8,455 and $9,000.
Gold Drops 7% Taking Out All Gains For the Past 22 Days
Gold has experienced a massive 4% sell-off today and broke below the 12 and 26-period EMAs with a ton of trading volume. The daily RSI was really overextended and the bears definitely took advantage of it.
Although lower than Bitcoin’s 18% price loss, the recent Gold performance shows that no asset is immune to economic uncertainty. It’s certainly odd that the oldest and most-trusted safe-haven is also seeing a nasty sell-off. The best explanation for the sell-off is the idea that investors were forced to sell large quantities of gold in order to cover losses from other assets.
Considering that the crypto market also experienced a crash, more investors had to cover losses and gold was the last standing asset.
This crash could boost the cryptocurrency market as it has been far less volatile for the past few days and investors are looking for other alternatives to gold.
Peter Schiff, a known Bitcoin critic claims that despite the recent Gold’s decline, the asset is still up 6.5% (4.35% now) since the beginning of 2020 but failed to acknowledge that Bitcoin is up 24% year-to-date.
Schiff also mentions that the recent 4% drop in gold is rare and doesn’t invalidate gold’s safe-haven status. As usual, most comments to the tweet were negative and critical of Schiff calling him out for his favoritism on Gold over Bitcoin.