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<\/p>\nBitcoin’s price correction from its record high of approx $42,000 in early January appears eerily similar to that of spot gold in August 2020.<\/p>\n
In retrospect, the precious metal rallied to its all-time high of $2,075.28 on January 8. Its wild move upward prompted traders to secure profits. As a result, the XAU\/USD exchange rate started correcting lower in the later sessions. The pair formed a support area between $1,847-1,863, which it eventually broke in late November, falling to as low as $1,764.<\/p>\n
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Marc Principato, the executive director of digitally-operated Green Bridge Investing, highlighted gold’s growing influence over the Bitcoin market in a note published Sunday. Just like the precious metal, the flagship cryptocurrency formed a consolidating descending channel pattern after forming its record high, leading Mr. Principato to envision BTC\/USD at $27,500.<\/p>\n
\n“If 27.5K is compromised, for our strategy, that will signal a broader consolidation is likely in play,” he added. “If you want to get a better idea of what this scenario may look like, look at XAUUSD<\/span> <\/span>from August to December. This is NOT a prediction; it is a potential scenario to prepare for if Bitcoin <\/span><\/span>chooses to go this route.”<\/p>\n<\/blockquote>\n
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So it appears, Bitcoin came halfway across copying the gold market’s moves from 2020. The cryptocurrency now tests the $30,774-30,188 area for a potential breakdown towards the downside support target. Apprehensively, that level could be near $27,700 or $23,500.<\/p>\n
\n“The 27.5K to 32K area so far has proven to be supportive,” reminded Mr. Principato, nonetheless.<\/p>\n<\/blockquote>\n