In a week where gold’s extraordinary eight-week winning streak came to an unexpected end, Bitcoin has stepped into the limelight, reestablishing its allure in the face of shifting market dynamics. Spot gold, which reached a record high of over $4,380 per ounce last Monday, has seen a dramatic pullback of more than 6%, settling around $4,120 as traders took profits ahead of the Federal Reserve’s imminent policy decision.
The bullion’s decline can be attributed to several converging factors. A wave of profit-taking, substantial outflows from exchange-traded funds (ETFs), and easing tensions in US-China trade relations have collectively diminished the demand for gold. Following discussions on trade, US and Chinese officials announced a “preliminary consensus” which has mitigated fears of impending tariffs that previously bolstered gold prices.
Adding to this shifting narrative, US Treasury Secretary Scott Bessent addressed the media after intensive negotiations in Malaysia, indicating that the threat of crippling tariffs is no longer a pressing concern. Such developments have set the stage for potential broader agreements between the US and China, thereby reducing the appeal of traditional safe-haven assets.
With expectations running high, the Federal Reserve is anticipated to implement a 25 basis point cut during its upcoming meeting on October 29, contributing to the bearish sentiment surrounding gold. Other precious metals, including silver and platinum, followed gold’s descent, reflecting a market reset ahead of the Fed’s decision.
In a fascinating turnaround, Bitcoin has surged over 5% in the past week, breaking free from a stagnant trading range and reclaiming the $113,500 mark. After lagging behind gold for much of the quarter, Bitcoin’s resurgence has excited traders, pushing its price briefly above $114,000 before stabilizing at around $113,700.
The BTC/gold ratio has also garnered attention, showcasing an oversold condition not seen in nearly three years. With the 14-day Relative Strength Index (RSI) dipping to 22.20, below historically significant thresholds, analysts are interpreting these signals as indicators of a potential market turnaround for Bitcoin, which could see renewed enthusiasm among traders.
Amid the backdrop of soaring odds—now exceeding 98%—for an impending rate cut by the Fed, market participants are keenly observing price trends. If Bitcoin manages to retain support above $113,000, some projections suggest a bullish trajectory could propel its price to between $118,000 and $123,000. This prospect is particularly enticing for those looking to capitalize on the newfound momentum as the market evolves in response to economic shifts.
As traders continue to speculate on the outcomes of the upcoming Fed meeting and crypto market fluctuations, Bitcoin stands poised to rediscover its competitive edge in this rapidly changing financial landscape.
