Bitcoin ETFs Surge Amid Gold Market Decline: Implications for BTC Price
Key Insights
- Bitcoin ETFs have attracted $839 million in inflows, while gold ETFs experienced $4.1 billion in outflows.
- Gold's historical patterns hint at an 8.3% rebound potential.
- Bitcoin maintains a robust position above a critical support level, aiming for $150,000 by year-end.
The allure of gold is diminishing as Bitcoin (BTC) begins to regain its momentum. Following a recent peak, gold has witnessed a steep decline of over 10.60%, dropping to $3,915, marking its most significant weekly fall since April.
This decline in gold aligns with a 6.70% rise in Bitcoin's price, showcasing a clear divergence as the US and China advance towards a trade agreement. The shift was spurred by President Donald Trump's comments about a "productive meeting" with China's Xi Jinping, resulting in reduced tariffs on fentanyl.
As market sentiment shifts and the crypto market gains momentum, gold's dip below the $4,000 threshold might suggest a potential pivot back to Bitcoin investments.
Bitcoin ETFs Attract Significant Investments
Since gold's peak on Oct. 20, US-listed Bitcoin ETFs have seen $839 million in net inflows, with holdings increasing over the past four sessions, according to Farside Investors. In contrast, gold-backed ETFs have suffered outflows totaling approximately 1.064 million ounces, equivalent to nearly $4.1 billion, as per Bloomberg data.
The largest single-day withdrawal in over six months occurred on Monday, with investors removing 0.448 million ounces of gold exposure.
Technically, Bitcoin is showing a strong support level near $101,790, aligning with the 20-week EMA and 1.0 Fibonacci retracement level. Holding above this confluence enhances Bitcoin's prospects of reaching $150,000 by the end of the year.
JPMorgan analysts project the BTC price could hit $165,000 by 2025, noting its current undervaluation relative to gold.
Gold's Bullish Potential
Despite the recent downturn, gold remains up about 50% year-to-date, supported by record central-bank purchases, fiscal imbalances, and the ongoing "debasement trade" as investors seek refuge from growing government debt and weakening fiat currencies. Metal trader David Bateman suggests that gold's bull run is still intact, even amid the current correction.
Technically, gold continues to hold above its 50-day EMA, and historical data indicates that past 10% corrections have often led to quick rebounds, suggesting a possible short-term bottom. Analysts predict gold could return to the $4,200–$4,250 range by December, reaffirming its uptrend.
Related: Bitcoin-gold correlation increases as BTC follows gold’s path to store of value
This analysis does not constitute investment advice. Readers should perform their own research when making investment decisions.