Gold at record highs: A threat for Bitcoin or a chance to reclaim $100k?

🤑 Bitcoin‘s $100k Dream: Will Gold’s Record Highs Be Its Downfall? 🤑

As the world basks in the glow of gold’s record highs, one can’t help but wonder: what’s next for Bitcoin?
While gold’s surge may seem like a blessing for risk assets, Bitcoin’s resilience is a tale of two markets.

Analysts whisper that with gold [XAU] hitting new heights, a potential top could shift capital into risk assets, leaving Bitcoin [BTC] in the dust.

The Great Gold Rush: A Threat to Bitcoin’s Dreams?

Gold’s 70% surge over 16 months has left its market cap a staggering $20.75 trillion, now $1.25 trillion above the combined top 10 assets. The Bank of America survey is clear: 58% of fund managers are overweight gold, while only 3% back BTC. This has limited Bitcoin’s appeal as a hedge, but a shift in positioning could provide upside momentum.

However, macro-driven volatility remains a key variable. BTC is trading 10% below its New Year rally, while gold has extended gains by 17%. The question remains: can Bitcoin reclaim its spot as the safe-haven of choice?

On two distinct market-wide retracements, gold printed new all-time highs while BTC lost key structural support, signaling inverse liquidity rotation. But, as the saying goes, “when the going gets tough, the tough get going.” Gold’s recent pullback saw its Relative Strength Index (RSI) retrace into the bullish demand zone before surging to a fresh ATH of $3,097.

With RSI now in the ‘extreme’ overbought zone, the risk of a corrective move increases. A decline in gold demand could trigger capital rotation into risk assets. Could this potential shift serve as a catalyst for Bitcoin to reclaim its safe-haven narrative in Q2?

The Real Test for Bitcoin Lies Ahead

Gold’s rally from $1,820 in October 2023 to $3,100 this week is nothing short of historic. Up +16% YTD, it’s outperforming stocks, currencies, and even the U.S. dollar – despite rising interest rates. But, as the old adage goes, “pride comes before a fall.” Can Bitcoin withstand the pressure?

Traditionally, a stronger USD should push gold lower. But instead, demand for gold has surged, breaking market norms. As inflation heats up, gold’s appeal as a safe haven is only growing. 1-month annualized PCE inflation just jumped above 4.0%, while 6-month figures are now at 3.1%. As inflation erodes buying power, gold’s appeal is only growing stronger.

As inflation rebounds, XAU has hit 50 all-time highs in the past 12 months. In fact, ZeroHedge reported that physical gold demand has surged alongside escalating trade tensions, reinforcing its role as a macro hedge.

In January, U.S. gold imports hit a record $30.4 billion. This represents a 2x increase from 2020 pandemic levels. Can Bitcoin keep up with the demand?

For BTC to challenge XAU’s dominance, a Bitcoin Strategic Reserve would need to be established. Without such a mechanism, expectations for BTC to reclaim $100k remain speculative, with risk assets still facing liquidity constraints.

Despite RSI overextension, XAU’s price action continues to exhibit strong demand absorption. This makes a pullback unlikely — particularly with the impending ‘reciprocal’ tariff announcement, a key macro risk event.

In such a climate, Bitcoin’s structural test lies ahead, as Gold remains positioned to extend price discovery into new all-time highs.

2025-03-30 19:07

The Great Gold Rush: A Threat to Bitcoin’s Dreams?

The Real Test for Bitcoin Lies Ahead

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