The copper/gold ratio rose above its 200-day moving average for the first significant time since September 2020, a development that historically coincided with the early stages of Bitcoin. bull markets.
The ratio currently stands at 0.00142, with copper trading at $6.65 per pound and gold at nearly $4,700 per ounce. Previous increases in the ratio in 2013, 2017, and 2021 corresponded to significant increases in Bitcoin prices.
The correlation coefficient between Bitcoin and the copper/gold ratio currently stands at -0.11, although it has rebounded strongly from -1.00. This suggests that the two assets are not yet positively correlated, but that the relationship is starting to strengthen. Historically, during Bitcoin’s strongest bullish periods, the correlation has moved toward or above 1.0.
The current negative reading largely reflects the earlier divergence phase, when the ratio was falling and bitcoin was generally falling faster than copper. As the ratio recovers, this relationship has historically converged alongside improving market conditions.
Historically, the copper-to-gold ratio has outpaced bitcoin by weeks or even months, suggesting that the current move may be in its early stages.
The copper/gold ratio is widely considered an indicator of economic dynamics and investors’ appetite for risk. Copper is closely tied to industrial demand and tends to outperform during periods of economic expansion, while gold is traditionally associated with defensive positioning. A rising ratio therefore signals a riskier macroeconomic environment.
