Gold continued its bearish momentum at the beginning of this new week.
Its price collapsed earlier today during the Asian session.
The rapid morning crash sent the price of gold to its lowest level in almost 6 months, falling below $1,700 an ounce.
The price has since recovered slightly and is trading at $1,751 at the time of writing.
The yellow metal is down 8% in 2021, and 14.87% from an all-time high of $2,040 in August 2020.
Analysts believe that high leverage trading is the reason for the current crash.
Forex expert Peter Pandit has attributed the current price volatility in gold to highly leveraged trading in the CME gold markets which offer a leverage of 15:1.
Others blamed a drop in the US unemployment rate from 5.9% to 5.4%.
The jobs data has pushed up US dollar and US bond yields, which is not a good equation for commodities at all.
The sudden crash in the price of gold has become the subject of ridicule and jokes in the cryptocurrency community due to the obvious comparisons between the two.
Bitcoin looks to higher levels in light of the loss of gold:
The price of gold has been in a downtrend throughout 2021, on the other hand, the price of bitcoin has managed to get rid of its correlation with the price of gold even more.
The top cryptocurrency has also come out of a price hibernation of nearly three months.
Bitcoin has also broken the price range between $30K and $40K and it looks like it is ready to move on to the second phase of its bullish trajectory.
The top cryptocurrency is currently trading at $43,686 back from its daily high of $45,246.
Bitcoin has managed to outperform every other asset despite losing a large portion of its gains over the past three months.
On the other hand, gold’s 10-year ROI has turned negative with the recent crash.
With the third wave of the pandemic approaching, Bitcoin and other cryptocurrencies may see another bullish rally while its arch-rival gold continues to show a downtrend, losing investors’ confidence in it as a store of value, which could be in favor of Bitcoin.