Since last night, Bitcoin has started recovering. It went from roughly $19,200 to a high of $19,700 overnight, a modest increase of 2.6%. However, the overall trend of the cryptocurrency is consolidation, in a constrained range, and has been for a few days, as is evident on the daily chart.
According to a new statement from Bank of America, Bitcoin volatility has decreased significantly in recent weeks, which might prove to be a beneficial development (NYSE:BAC).
In fact, the bank claimed that after a time when it was predominantly traded as a hazardous asset, bitcoin’s moves relative to other assets may suggest that traders now view it as a safe haven once more.
The biggest cryptocurrency now has a connection with gold during the past 40 days of about 0.50, down from almost zero in mid-August. Although the correlations between the S&P 500 and the Nasdaq 100 remain higher, at 0.69 and 0.72 respectively, they have steadied and are now below the recent highs. According to BofA analysts, this might mean good things for Bitcoin.
As long as macrouncertainty exists and the market hasn’t reached its lowest point, they argued, investors may consider bitcoin as a relatively safe haven. “A diminishing positive correlation with SPX/QQQ and a quickly rising correlation with XAU reflect this,” they wrote.
Recall that Mike Novogratz recently stated that he views bitcoin as “the canary in the coal mine” alongside gold and anticipates that it will rebound before other cryptocurrencies. This is consistent with BofA’s assessment.