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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.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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