Main Insights:
Bitcoin ETFs attracted $839 million in new investments while gold ETFs faced outflows of $4.1 billion.
Historical trends indicate a potential 8.3% rebound in gold prices.
Bitcoin (BTC) remains robust above key technical support, targeting $150,000 by the end of the year.
Gold is losing its luster rapidly, coinciding with the resurgence of its “digital” counterpart, Bitcoin (BTC).
Just a week after reaching a peak above $4,381, gold has declined over 10.60%, plunging to a low of $3,915 on Thursday, marking its largest weekly drop since April.
The downturn in gold corresponds with a nearly 6.70% surge in Bitcoin’s value, reflecting a notable divergence as the US and China edge closer to a trade deal.
This shift follows Donald Trump’s comments about a “fantastic meeting” with Xi Jinping on Thursday, where they agreed to halve fentanyl tariffs from 20% to 10%, effective immediately.
As risk appetite grows and cryptocurrency markets intensify, is gold’s drop below $4,000 a signal that traders could be moving back towards Bitcoin in the coming months?
Bitcoin ETFs draw $839 million amidst gold’s decline
Bitcoin ETFs listed in the US have seen net inflows of $839 million since gold reached its peak on October 20, continuing a consistent rise in holdings over the last four sessions, according to data from Farside Investors indicates.
Conversely, gold-backed ETFs recorded outflows totaling around 1.064 million ounces (approximately $4.1 billion) since October 22, as per Bloomberg data.
This includes the largest single-day withdrawal in over six months, with a 0.448 million ounce exit from gold exposure on Monday.
Current technical indicators for BTC suggest a solid support level around $101,790.
This aligns with the 20-week exponential moving average (20-week EMA; depicted by the green wave) and the 1.0 Fibonacci retracement level. Remaining above this support intersection enhances BTC’s chances of reaching $150,000 by the year’s close.
Analysts from JPMorgan predict that the price of BTC will rise to $165,000 by 2025, arguing that it remains undervalued compared to gold.
Analysts believe gold still has room to rise
Gold has risen about 50% year-to-date, supported by historic central bank purchases, ongoing fiscal challenges, and the prevailing “debasement trade,” where investors seek refuge from rising government debt and declining fiat currencies.
Metal trader David Bateman contends that the fundamentals underpinning gold’s bull market remain intact despite the recent pullback.
Technical analysis further indicates that gold is undergoing a bull market correction, remaining above its 50-day exponential moving average (50-day EMA, represented by the red wave).
Gold has consistently bounced off the 50-day EMA support in the past two years, resulting in rebounds ranging from 4% to 33%, as illustrated below.
Additionally, gold’s previous 10% corrections over the last thirty years have typically led to rapid recoveries within days, indicating a possible short-term bottom rather than deeper declines.
Related: Correlation between Bitcoin and gold strengthens as BTC follows gold’s trajectory as a store of value
The prior ten occurrences of such pronounced declines resulted in positive two-month returns, with an average recovery of 8.3%, based on data highlighted by Sabu Trades.
If the pattern persists, gold may revisit the $4,200–$4,250 range by December, effectively retesting its all-time highs and affirming its overall upward trend.
Furthermore, it could potentially reach HSBC’s $5,000 target in 2026, provided it remains above the red wave.
This article does not constitute investment advice or recommendations. All investment and trading actions carry risk, and readers should perform their own due diligence before making any decisions.
