Gold big dump of 10% releases signal: Experts predict Bitcoin Q4 chase the price

This week, both gold and Bitcoin (BTC) saw a fall, but the underlying narratives of the two are diverging. Gold has experienced a big dump of about 10% from its high in six days, marking a rare decline not seen in 45 years, while Bitcoin has shown relative strength, still rising 2% this week. Experts point out that this divergence has raised expectations of a “leading-lagging relationship,” suggesting that gold's consolidation could create space for Bitcoin to experience a pump. Despite the differing fundamentals of capital flows, experts remain cautiously bullish on the outlook for the fourth quarter (Q4).

Rare Pullback in Gold: Easing Geopolitical Risks and Historical Data Analysis

According to Decrypt, after a long period of rise, gold has recently experienced a sharp reversal, with a decline of about 10% within six days.

• Downward driving factors: Senior researcher of the crypto industry, Tim Sun, believes that the recent correction in gold reflects a partial easing of geopolitical tensions and trade frictions, as well as profit-taking pressures.
• Historical Backtrack: In the past 45 years, gold has only experienced 10 occurrences of a big dump of 10% within six days. Historical data shows that in all these cases, gold typically takes about two months to recover from the decline, with an average rebound of approximately 8.39%.
• Extended recovery period: Merkle Tree Capital Chief Investment Officer Ryan McMillin warned that given the recent strong rise in gold, the rapid rebound should not be seen as a fundamental expectation. Tim Sun echoed this view, pointing out that due to the strong support of the AI cycle for the US stock market, this consolidation period for gold may be longer than usual.

Asset Diversification and “Chasing Upward Rise” Opportunities

The performance difference between gold and Bitcoin as two “store of value” assets has once again attracted market attention to their “leading-lagging relationship.”

• Bitcoin's relative strength: When gold falls sharply, Bitcoin shows relative resilience, rising 2% this week.
• “Chasing rise”: Ryan McMillin believes that the pause in gold momentum can create space for Bitcoin to experience a chasing rise.

However, Tim Sun pointed out that due to the differences in the fundamental demand for the two assets, a simple capital rotation should not be expected:

• Main demand for gold: dominated by sovereign wealth funds, central banks, and conservative asset managers.
• Bitcoin liquidity entities: Mainly driven by ETFs and investors with a higher risk appetite.

Q4 Cautiously Bullish Outlook: Macroeconomic Liquidity Recovery is Key

Both experts remain bullish on Bitcoin's short-term prospects while maintaining a cautiously optimistic view on gold.

• Bitcoin: Institutional Adoption Phase: Ryan McMillin explains that Bitcoin is entering a phase of institutional adoption and increased liquidity, which could drive it into the next round of pump.
• Gold: Fluctuating upwards: Tim Sun maintains a path of “fluctuation and upward bias” for gold, primarily supported by the expansion of global fiscal deficits and ongoing risk events.
• Common trajectory: For Bitcoin, Tim Sun also observed a similar “range rise” trajectory, which is attributed to the gradual recovery of macro liquidity.

Conclusion

The rare large correction of gold brings structural opportunities for the potential performance of Bitcoin, as the market is at a critical turning point. Although gold is expected to recover its losses within two months based on historical data, its consolidation period may provide valuable breathing space for institution-driven rises in Bitcoin. Investors should pay attention to whether macro liquidity can recover as expected, which will be a key factor in determining the Q4 trends of these two major value storage assets.