After a significant surge, gold prices are now retreating, sparking renewed interest in Bitcoin (BTC) as investors look to reposition capital. Tuesday’s rebound in gold prices—surpassing $112,000—suggests a modest capital shift toward the cryptocurrency market.
Despite recent headwinds, asset manager Bitwise has released a new research report forecasting strong upside potential for Bitcoin, the world’s largest cryptocurrency by market capitalization. Authored by Andre Dragosch, Max Shannon, and Aayush Tripathi from Bitwise Europe’s research and analysis division, the study examines Bitcoin’s relative performance against traditional assets.
According to the report, Bitcoin and other cryptocurrencies have lagged traditional markets amid bearish sentiment driven by weakness in U.S. regional bank stocks. The researchers highlight Bitcoin’s evolving correlation with gold, noting that the relationship fluctuates depending on overall market risk appetite. In a “risk-on” environment, Bitcoin has historically outperformed gold, suggesting potential for renewed leadership.
Capital Rotation Could Boost Bitcoin
Gold’s impressive rally this year has been fueled by expectations of looser monetary policy and concerns surrounding the U.S. fiscal deficit. Bitwise’s analysis indicates that even a modest reallocation of capital from gold to Bitcoin could significantly amplify BTC’s price.
The firm estimates that a 3% to 4% shift in gold investments toward Bitcoin could potentially double BTC’s market value. A more substantial 5% capital rotation could drive prices as high as $242,391, representing a 126% increase from Bitwise’s baseline price of $107,240 at the time of publication.
The Key Level: $118,000 for $BTC
Historical data supports this thesis. The report notes that Bitcoin’s past performance leadership often reemerges during risk-on phases—similar to October 2020, when Bitcoin broke to new all-time highs just as gold’s rally began to fade.
On-chain data further identifies a strong liquidity cluster between $93,000 and $118,000, marking a critical zone separating bullish and bearish market conditions. A decisive breakout above $118,000, according to Bitwise’s research, could signal the start of a new upward cycle for Bitcoin.
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