Cryptocurrencies are behaving more like gold as volatility eases: Here’s why

Cryptocurrencies are behaving more like gold as volatility eases: Here’s why

Dubai: Cryptocurrencies have been consistently exhibiting an uncharacteristic lack of volatility, and such a stability in prices have come amid the top crypto Bitcoin’s increasing correlation with gold prices. “The largest cryptocurrency has been largely flitting between the $19,000 (Dh70,000) and $20,000 (Dh73,500) price levels since the start of September – a remarkable stabilisation for Bitcoin, which was once synonymous volatility,” said Brian Deshell, a UAE-based cryptocurrency trader and analyst. “The macro picture has become increasingly important for Bitcoin this year. Whenever some market momentum seems to fade, stocks and cryptocurrencies alike are mostly holding onto those gains – making them an even better-than-usual investment.” Red-hot inflation this year has pushed central banks worldwide to aggressively tighten financial conditions, raising interest rates and, in turn, increasing the prospect of recession. This gloomy macro-outlook has contributed to crypto trading in correlation with other risk-sensitive assets like stocks. Bitcoin has been off its all-time high from nearly a year ago by more than 70 per cent, and analysts have been looking for the crypto to break lower – to retest its June lows of about $17,000 (Dh36,731) and find a new bottom, potentially as low as $10,000 (Dh36,731) – if it fails