Gold Bulls Face Make-or-Break Test as Bitcoin Lags 'Parabolic' Rally

Source: Cryptonews Original Title: Gold bulls face make-or-break test as Bitcoin lags ‘parabolic’ rally Original Link:

Market Context

Global precious metals markets reached unprecedented levels this week, with gold and silver breaking previous all-time highs. The surge in hard assets reflects investor movement away from sovereign debt amid growing global macroeconomic uncertainty. Bitcoin surpassed its highest level of the year during the same period, though its movement appeared more restrained compared to precious metals.

The Gold-to-Bitcoin Rotation Theory

André Dragosch, head of research at Bitwise Europe, argues that gold prices serve as a leading indicator for the cryptocurrency market. Through statistical causality tests, Dragosch demonstrated that gold tends to anticipate Bitcoin’s movements with a lag of between four and seven months. This “Gold to Bitcoin Rotation” pattern suggests that institutional capital moves to digital assets after initially taking refuge in gold, once risk appetite stabilizes.

Analyst observations note that while gold is in a phase of “parabolic price discovery,” Bitcoin is only in the early stages of a corresponding shift.

Supply Dynamics and ETF Impact

Matt Hougan, Chief Investment Officer at Bitwise, compared the current Bitcoin market to gold’s recent rally. Hougan explained that gold’s parabolic rally resulted from supply depletion after years of massive central bank purchases.

Since the launch of spot Bitcoin ETFs in January 2024, these instruments have purchased over 100 percent of new supply issued. While the price has been restrained by sales from long-term holders, Bitcoin could undergo significant revaluation once these sellers exhaust their holdings, similar to what occurred with gold.

Market Sentiment and Options Positioning

Recent macroeconomic stress and policy-related uncertainties have affected dollar stability. Market analysts note that gold reacts immediately as a primary safe haven asset, while Bitcoin attracts capital after initial market shocks are absorbed.

On derivatives markets, traders are positioning aggressively with high-strike calls for the coming months. Analysts point to substantial upside targets for Bitcoin, should the historical correlation with gold persist. This would represent percentage gains similar to precious metals performance, with silver historically tending to outperform gold in late stages of bullish commodities markets.