Lumber to gold ratio breaks down, suggesting a risk-off environment

quick take

  • So far, 2023 has been a good year for Bitcoin and risk assets, with Bitcoin up 71%, Nvidia up 92% and Meta up 68%.
  • The S&P 500 is up 7% and the Nasdaq is up 20%.
  • But the timber-to-gold ratio points to a risk-off environment, and the stock market always follows a crash.

Highlighted are the areas where the wood-to-gold ratio collapsed and the S&P 500 subsequently fell.

  • 1987 Crash
  • 1990 bear market
  • 2000 tech bubble
  • 2008 Lehman Shock
  • Summer Crash 2011
  • 2018 4Q correction
  • 2020 Covid Crash

This could mean further headwinds for Bitcoin as it correlates to some extent with the US stock market.

Wood to gold ratio: (Source: Trading View)

The wood-to-gold ratio has collapsed, suggesting that the risk-off environment first appeared on CryptoSlate.

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