Market
Has Bitcoin Lost Its Safe Haven Status to Gold and S&P 500?
Traditional assets, including gold and the S&P 500, have reached new all-time highs. In contrast, Bitcoin (BTC) has decoupled and continued its underwhelming performance, which has lasted almost six months.
As a result, investors are questioning whether cryptocurrency still serves as a hedge against inflation compared to traditional assets. This on-chain analysis explores in detail whether BTC will continue to lag behind or if its status as a safe haven remains intact.
Bitcoin Falls Behind Gold, Others
Bitcoin’s price is $58,166, down 21% from its all-time high in March. Gold, on the other hand, has recently reached a new all-time high, with its value at $2,564. The famous S&P 500 also did the same while surpassing $5,650, with Silver on the verge of doing the same.
Based on BeInCrypto’s findings, this surge is attributable to the positive US CPI report released earlier this week. Meanwhile, the disparity between BTC and these traditional assets is similar to the situation the cryptocurrency experienced in May 2021.
During that period, Bitcoin’s price dropped by 36%. The current condition is also similar to the performance in November 2021, when the coin reached the top of the last bull market.
Regarding this matter, CryptoQuant, in its weekly report, explained that investors seem to lean toward less risky assets.
“A period of negative correlation between Bitcoin and Gold, with Gold increasing and Bitcoin decreasing, typically signals a risk-averse environment where investors favor traditional safe-haven assets like Gold over speculative assets like Bitcoin,” the report highlighted.
Following these milestones, Bitcoin might continue to be in a largely bearish phase. One reason for this bias is the current status of the Bull/Bear Cycle. This momentum metric measures the difference between the profit and loss index and the coin’s 365-day moving average.
When the metric is above zero, it’s a bull cycle. A reading below zero, on the other hand, indicates a bear market. As of this writing, the Bull/Bear Cycle indicator has fallen below the threshold, suggesting that Bitcoin’s price might have entered a bear mode.
Read more: Who Owns the Most Bitcoin in 2024?
BTC Price in Danger Unless Fresh Capital Enters the Market
Another metric supporting this bearish bias is the 365-day Market Value to Realized Value (MVRV) ratio. This ratio shows how far or close Bitcoin’s price is from the Realized Price, the average price at which every coin holder purchased the cryptocurrency.
High values of the MVRV ratio indicate overvaluation. Low values, on the flip side, suggest undervaluation.
According to Santiment, Bitcoin’s 365-day MVRV ratio is less than 1%, indicating that the cryptocurrency could be subject to bearish forces. As seen in the chart below, once BTC slides to the negative territory, it becomes challenging to return to the upside.
Therefore, if the ratio eventually drops below the green region, Bitcoin’s price might drop to $45,000, and this bull cycle might finally transition to the bear cycle.
In addition, the Long-Term Holder (LTH) Spent Output Profit Ratio (SOPR) has been declining since July. An increase in LTH-SOPR indicates that holders are selling at a higher profit, making it easier for BTC to attract fresh demand.
The ongoing decline, in turn, suggests that long-term holders are selling at lower profits. This could make it difficult for Bitcoin to generate the higher demand necessary to drive a price increase.
Read more: 7 Best Crypto Exchanges in the USA for Bitcoin (BTC) Trading
However, Bitcoin could start climbing toward its all-time high if profits from traditional assets flow into BTC and other cryptocurrencies.
At the moment, Bitcoin is seeing a growing wave of positive sentiment, which is tied to the recent milestones achieved by gold and other assets. According to Santiment, a significant level of doubt may be necessary for BTC to make a strong push toward its all-time high.
“When the crowd begins conveying doubt again, BTC will truly begin testing its March all-time high market values,” the on-chain analytics platform said on X.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
Polymarket Faces Ban in France as US Election Betting Ends
According to a report from The Big Whale, the National Gaming Authority (ANJ), France’s gambling regulator, is preparing to block the prediction markets platform Polymarket.
Polymarket, the decentralized platform that allows users to bet on the outcome of political events, sports, and other occurrences using cryptocurrency, has gained popularity in recent months, especially with bets surrounding the US presidential election. More than $3.2 billion was reportedly wagered on the platform during this high-stakes period, with a record-breaking $294 million in volume on November 5 alone.
France Users May No Longer Access Polymarket
According to The Big Whale, a French website that covers the crypto industry, the ANJ’s impending ban comes after a French trader placed a $30 million bet on a Trump victory, reportedly attracting the regulator’s scrutiny.
The trader’s wager positioned him to make approximately $19 million in profits, a sum that has intensified concerns over Polymarket’s compliance with French gambling laws. A source close to the ANJ stated that despite Polymarket’s use of blockchain and cryptocurrency, its activities are akin to gambling, making it subject to restrictions under French law.
“We are aware of this site and we are currently examining its operation as well as its compliance with French gambling legislation,” The Big Whale reported, citing an ANJ spokesperson.
Read more: What is Polymarket? A Guide to The Popular Prediction Market
Legal expert William O’Rorke from ORWL Avocats explained that although Polymarket does not specifically target French users, its activities fall squarely under gambling regulations.
“Polymarket involves betting money on uncertain outcomes, which aligns with the legal definition of gambling,” O’Rorke noted.
Against this backdrop, the ANJ is well within its mandate to block the platform’s access in France. Accordingly, the French regulator may enforce the ban by blocking Polymarket’s domain name in France. It amy also pressure third-party players, like media outlets and online directories, to limit access to Polymarket links.
However, French users may still circumvent this by using virtual private networks (VPNs). This is because Polymarket’s crypto-based infrastructure allows for relatively anonymous participation.
France’s looming ban is not the first regulatory roadblock Polymarket has encountered. In 2022, the US Commodity Futures Trading Commission (CFTC) fined Polymarket $1.4 million for failing to register as a designated contract market. The CFTC also challenged Kalshi’s operations due to questions about betting on political events.
Polymarket’s Fate After US Elections
Meanwhile, the US election was a significant catalyst for Polymarket. It drove the platform to new heights in user engagement and bet volume. Polymarket’s election-related markets have been featured on major financial platforms, including Bloomberg, highlighting the platform’s appeal to mainstream finance.
As BeInCrypto reported, Polymarket’s election betting topped $3 billion, reflecting unprecedented participation. The platform, however, faces a crossroads in its path forward. Following the climax of the US election on Wednesday, data from Dune Analytics shows a steep decline in Polymarket’s activity.
Daily active addresses and transaction volumes, which soared in the election lead-up, have notably dwindled as election-related betting winds down. For instance, Polymarket’s open interest, a key indicator of active betting engagement, dropped from $350 million to $268 million after the polls closed. Similarly, monthly new accounts have also dropped by over 41% between October and November.
Against this backdrop, Polymarket may need to diversify its market offerings or potentially embrace a new model to maintain user interest. This is considering election-related activity comprised the majority of the prediction market’s volume.
Rumors are circulating about a potential move toward a decentralized governance token, which could distribute control over Polymarket’s operations to its community. This shift would reduce the liability of the central authority by decentralizing decision-making, though it remains theoretical, with no clear timeline.
Read More: How To Use Polymarket In The United States: Step-by-Step Guide
Polymarket’s fast ascent and regulatory challenges highlight broader industry tensions between innovation and compliance. With election predictions no longer a draw and an impending ban in France, Polymarket’s future remains uncertain.
Its long-term viability may depend on how well it adapts to evolving regulatory landscapes and whether it can maintain popularity beyond election season peaks.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
XRP Price Ready to Rally? Signs Point to a Bullish Move
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Market
Solana (SOL) Rallies Strongly, Setting Sights on $200
Solana started a fresh increase above the $172 support zone. SOL price is rising and might soon aim for a move toward the $200 level.
- SOL price started a fresh increase after it settled above the $165 level against the US Dollar.
- The price is now trading above $172 and the 100-hourly simple moving average.
- There was a break above a key bearish trend line with resistance at $162 on the hourly chart of the SOL/USD pair (data source from Kraken).
- The pair could continue to rise if it clears the $192 resistance zone.
Solana Price Starts Fresh Rally
Solana price formed a support base and started a fresh increase above the $162 level like Bitcoin and Ethereum. There was a strong move above the $165 and $172 resistance levels.
There was a break above a key bearish trend line with resistance at $162 on the hourly chart of the SOL/USD pair. The price even cleared the $185 level. A high is formed at $192 and the price is now consolidating gains. It is trading above the 23.6% Fib retracement level of the upward move from the $155 swing low to the $192 high.
Solana is now trading above $172 and the 100-hourly simple moving average. On the upside, the price is facing resistance near the $192 level. The next major resistance is near the $195 level.
The main resistance could be $200. A successful close above the $200 resistance level could set the pace for another steady increase. The next key resistance is $212. Any more gains might send the price toward the $220 level.
Another Dip in SOL?
If SOL fails to rise above the $192 resistance, it could start a downside correction. Initial support on the downside is near the $188 level. The first major support is near the $180 level.
A break below the $180 level might send the price toward the $172 zone or the 50% Fib retracement level of the upward move from the $155 swing low to the $192 high. If there is a close below the $172 support, the price could decline toward the $165 support in the near term.
Technical Indicators
Hourly MACD – The MACD for SOL/USD is gaining pace in the bullish zone.
Hourly Hours RSI (Relative Strength Index) – The RSI for SOL/USD is above the 50 level.
Major Support Levels – $188 and $185.
Major Resistance Levels – $192 and $200.
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