While comparing gold and bitcoin gives some idea of the patterns in the market, can the slide of junior miners be predicted by the same method?
While cryptos were on the rise and the overall sentiment was positive, investors dropped their PM holdings to buy cryptos as they forecasted that the latter would continue to rally"to the moon." And while it didn't matter that much for gold, as the yellow metal has powerful buyers and sellers that are not interested in cryptos, it mattered a lot to the junior mining stock sector as the buying power waned.
This specific phenomenon can be seen from a broader point of view when one compares the prices of gold and bitcoin. Interestingly, I originally featured the above chart many months ago, and please note that this tendency worked like a charm recently. Remember when I wrote that Bitcoin was topping at about $50,000? Well, it did move a bit above that, but it didn't trade there for long.
The interest was this high only when there were major turnarounds in Bitcoin. And since it's crystal clear that the previous move in Bitcoin was to the downside, it can't be a top. Therefore, it's likely that there's a major bottom in Bitcoin.