Bitcoin regains safe-haven status, moves in sync with gold amid coronavirus scare

Bitcoin (BTC) resumed the upside after a short-lived consolidation period. The first digital currency has gained over 3% of its value in recent 24 hours to trade at $8,620 at the time of writing. Despite the retreat from the intraday high of $8,679, Bitcoin continues moving within a short-term bullish trend amid expanding volatility.

Bitcoin to move in sync with gold

Stock markets and oil prices collapsed on Monday amid growing fears and anxiety about the economic impact of China’s spreading virus outbreak. The traditional safe-haven assets such as gold, silver,  Treasury notes and Japanese Yen have been gaining ground during early Asian hours. Bitcoin has been gaining ground too, supporting the narrative of its safe-haven status. 

While Bitcoin's correlation with risk sentiments is still unclear, it tends to grow in sync with gold futures. Into the end of the previous week, open interest on gold futures jumped nearly to 10,500 contracts, which means that the market has reversed the previous dropdowns. Gold started Monday with the bullish gap which is not closed yet.

The further escalation of trade disputes between the US and the rest of the world will fuel investors' interest in gold – both physical and digital. The correlation between the two assets may grow further.

According to Bloomberg's Mike Mcglone research, BTC will live up to its title as a digital gold in 2020. The expert believes that the first cryptocurrency has a lot in common with the precious metal, which means they are bound to move in sync after all.  As 2020 is expected to become a prime year for safe-haven assets, "movements in gold will act as a proxy for BTC’s price performance," Mcglone explained.

BTC/USD: technical picture

From a technical point of view, BTC/USD bottomed at $8,200 and initiated a recovery within the current trading range. The critical resistance is created by a congestion area on approach to $8,900. BTC bulls are likely to slow down here. Once this barrier is out of the way, the upside momentum will gain traction with the next focus on $9,000 followed by the highest level of 2020 at $9,184.

On the downside, the critical support comes at $9,200, which is the lower border of the above-said consolidation range. A sustainable move below this line will attract new buyers to the market and push the price towards $8,000, reinforced by SMA100 daily.

BTC/USD daily chart