Gold and silver correct while Bitcoin tests support

As predicted earlier this week, the price of gold and silver corrected this week, and the very hot rally in precious metals has now lost some steam (which analysts feel is healthy as gold had really pumped lately). Although Bitcoin was also expected to correct, losses for the largest digital currency remained very limited. At the time of writing, Bitcoin is trading at$111k.

Debasement trade

This week’s gold correction marked the end of the so-called “debasement trade,” which is the term Wall Street investors used for protecting yourself against the falling dollar by buying both gold and tech stocks. Gold is the classic safe haven, while tech stocks typically rise when the dollar falls (because their US exports typically become cheaper).

Note that gold and Bitcoin have developed a kind of leader-follower momentum in recent years, with a gold rally usually being followed by a Bitcoin rally a few weeks later. So, if you follow that logic again, Bitcoin could well correct in the following week.

Fear

You can also clearly see this in the crypto fear and greed index, which hit its lowest level for the month yesterday. The market is anxious and fears that Bitcoin will close October with a loss for the first time since 2018.