Here’s why one technical trader is picking bitcoin over gold

Tuesday's sell-off in both bitcoin and gold has many suspecting that the two are correlated, but Todd Gordon thinks that not only is there no such relationship, bitcoin is also the better bet for a rally.

The TradingAnalysis.com founder says that while a shorter-term chart of bitcoin and gold together may show that the two are moving in tandem, a longer-term chart actually tells a different story. Looking at a four-hour chart of bitcoin and gold, Gordon remarked Tuesday on CNBC's "Trading Nation" that "the two have run up fairly well here together in August."

However, looking at a chart of both dating to March, Gordon remarks that while gold has failed to break through the $1,300 level three times, bitcoin actually saw big rallies right when the yellow metal dropped.

"The three major peaks in gold were associated with bitcoin at $1,222, in June at $2,969, [and more recently at] $4,374," said Gordon. "So as gold has triple topped at around $1,300, bitcoin is making new highs."

The consistent rally in bitcoin and gold's failure to reach $1,300 has the trader concluding that out of the two, there is a "buying opportunity in bitcoin."

The cryptocurrency has surged this year and is now up about 326 percent year to date.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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