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

• Gold’s file highs in Q1 instructed that risk-off sentiment has dominated.
• BTC has already proven resilience, consolidating close to highs whereas gold surged.

Analysts speculate that with Gold [XAU] hitting new highs in Q1 and outperforming Bitcoin [BTC] throughout commerce tensions, a possible high may shift capital into threat property.

If this rotation happens, may BTC acquire momentum to reclaim $100k in Q2?

Potential rotation from Gold to BTC 

Gold’s 70% surge over 16 months has pushed its market cap to $20.75 trillion, now $1.25 trillion above the mixed top 10 assets. Consequently, analysts anticipate a capital shift if an area high types. 

The Financial institution of America survey reinforces the thought – 58% of fund managers obese gold, whereas solely 3% again BTC. This has restricted Bitcoin’s attraction as a hedge, but a shift in positioning may present upside momentum.

Nonetheless, macro-driven volatility stays a key variable. BTC is buying and selling 10% beneath its New 12 months rally, whereas gold has prolonged features by 17%.

Notably, XAU’s vertical growth aligned with BTC’s corrective section, suggesting liquidity displacement.

Supply: TradingView (XAU/USD)

Put merely, on two distinct market-wide retracements, gold printed new all-time highs whereas BTC misplaced key structural help, signaling inverse liquidity rotation. 

Nonetheless, Gold’s current pullback noticed its Relative Power Index (RSI) retrace into the bullish demand zone earlier than surging to a contemporary ATH of $3,097.

With RSI now within the ‘excessive’ overbought zone, the chance of a corrective transfer will increase.

A decline in gold demand may set off capital rotation into threat property. May this potential shift function a catalyst for Bitcoin to reclaim its safe-haven narrative in Q2?

The actual take a look at for Bitcoin lies forward

Gold’s rally from $1,820 in October 2023 to $3,100 this week is nothing wanting historic. Up +16% YTD, it’s outperforming shares, currencies, and even the U.S. greenback – regardless of rising rates of interest.

Historically, a stronger USD ought to push gold decrease. The straightforward cause? A powerful greenback makes Treasury yields extra engaging. However as an alternative, demand for gold has surged, breaking market norms.

On the similar time, inflation is heating up. 1-month annualized PCE inflation simply jumped above 4.0%, whereas 6-month figures at the moment are at 3.1%. As inflation erodes shopping for energy, gold’s attraction as a protected haven is simply rising.

Supply: Bloomberg

As inflation rebounds, XAU has hit 50 all-time highs previously 12 months. Actually, ZeroHedge reported that bodily gold demand has surged alongside escalating commerce tensions, reinforcing its function as a macro hedge.

In January, U.S. gold imports hit a file $30.4 billion. This represents a 2x enhance from 2020 pandemic ranges. 

For BTC to problem XAU’s dominance, a Bitcoin Strategic Reserve would should be established.

With out such a mechanism, expectations for BTC to reclaim $100k stay speculative, with threat property nonetheless going through liquidity constraints.

Regardless of RSI overextension, XAU’s worth motion continues to exhibit robust demand absorption. This makes a pullback unlikely — notably with the approaching ‘reciprocal’ tariff announcement, a key macro threat occasion.

In such a local weather, Bitcoin’s structural take a look at lies forward, as Gold stays positioned to increase worth discovery into new all-time highs.