Gold’s recent parabolic price movement on monthly charts could be signaling a major bullish catalyst for cryptocurrency markets, according to crypto analyst Dan Gambardello.
The analyst has identified similarities between gold’s current behavior and patterns observed in July-August 2020, which preceded a massive bull run in both Bitcoin and Cardano price.
Gambardello points out that the last time gold made a similar 50% upward move toward all-time highs, it was followed by Cardano (ADA) surging approximately 3,000% in the subsequent months.
Historical Gold Cycle Preceded Major Crypto Bull Run
The analysis reveals a potentially important market pattern by examining what happened between July 2019 and August 2020.
This was when gold experienced a substantial 50% upward move before reaching a local top.
During this gold rally, cryptocurrency markets were relatively quiet. Bitcoin and Cardano prices also showed minimal price action for nearly a year.
According to Gambardello, once gold topped out in August 2020, Bitcoin entered a parabolic bull run phase that lasted for several months.
For Cardano, the effect was even more pronounced, though it lagged slightly behind Bitcoin. After gold reached its peak, ADA initially continued to move sideways.
The lag between gold’s top and Cardano’s move suggests that altcoins might respond to these market conditions with some delay compared to Bitcoin.
This historical sequence saw Cardano eventually surge approximately 3,000% after gold completed its upward cycle.
The analyst emphasizes that this pattern should be considered alongside other indicators rather than in isolation.
He observes that during the previous cycle, the M2 global liquidity index (a measure of money supply) was trending upward while gold was making its significant move.
Looking at current conditions, Gambardello notes that gold is again making a parabolic move on monthly charts while the M2 money supply is trending upward.
This is mirroring the conditions that preceded the last major crypto bull run.
M2 Global Liquidity Trends Reinforce Bullish Outlook
A key component of Gambardello’s analysis is the correlation between cryptocurrency price action and the M2 global liquidity index.
When overlaying this data on both historical and current charts, he identified notable relationships that strengthen the case for a potential bull market ahead.
During the 2020 cycle, the M2 money supply was trending upward while gold was making its significant move.
After gold topped out, cryptocurrencies followed with substantial gains as liquidity continued to increase.
Looking at current market conditions, Gambardello highlighted that the M2 money supply is once again trending upward while gold is making its parabolic move.
He specifically referenced a “108-day lead time” in the M2 data that had been historically relevant for cryptocurrency price movements.
The correlation appears particularly strong for Cardano price. When looking into ADA’s price chart alongside the M2 money supply indicator, Gambardello notes similarities between current patterns and those observed before the previous bull market.
He emphasized that these are trend indicators rather than precise price targets or timeframes.
Technical Levels Represent Key Levels for Cardano Price to Breach
Underneath macroeconomic indicators, Gambardello refers to several significant technical levels Cardano must break through to confirm a bull trend.
Currently, ADA faces short-term technical tests that could define its near-term trend.
The initial significant level is the 20-day moving average, and ADA was above it at press time.
According to the analyst, remaining above this level and creating distance from it is necessary for building upward momentum.
Following this initial resistance, two significant technical hurdles stand between current prices and what Gambardello refers to as the bull market doors.
The first significant hurdle is the 50-day moving average, approximately $0.69. The second hurdle is the 200-week moving average, which is approximately $0.71.
These two levels intersect to create what he refers to as the bottom of the bull market door area.
While he is generally positive, Gambardello sees a chance that prices will keep dropping in the near term. He says ADA could drop to the $0.40s before it starts to rise more strongly.
