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Reasons why Bloomberg referring Bitcoin as a ‘Resting Bull’ is incorrect

By Luke Flowers - Cryptocurrency Broker

A recent report by Bloomberg says that Bitcoin is a resting bull. However, they have inaccurately interpreted key indicators in order to prove their claim.

Bloomberg recently released their mid-year crypto outlook. This report claims that Bitcoin’s price volatility will continue to decrease as it is starting to behave more like gold. According to the report, the primary demand and other indicators, such as adoption, will also remain positive. It also states that BTC is ready for a breakout at the $13,000 dollar resistance. This perspective may seem defendable, but the arguments in the report seem inaccurate to some who buy and sell cryptocurrency.

The counterargument of Bloomberg's report says that according to the correlation metrics, Bitcoin has drifted away from gold’s hedge status for the past couple of months. In fact, Bitcoin has synchronized its trading with the S&P 500.

The primary reason why Bitcoin became famous in the eyes of investors and has persuaded them to buy and sell Bitcoin during the past few years is that it lacks correlation to traditional investments. Surely, there have been small periods when BTC performed in sync with them, but it was mostly due to the same economic and socio-political headwinds that affected every other asset class as well.

In 2020, Bitcoin's correlation will continue to increase with the S&P 500. Bitcoin has no clear trend with respect to gold prices. Recent data backs this statement by providing negative figures for correlation since December 2018. This negative correlation clearly points towards the fact that gold and BTC are performing in opposite directions. So, the argument presented by Bloomberg is flawed.

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