Key takeaways:
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Bitcoin ETFs saw $839 million in inflows while gold ETFs lost $4.1 billion.
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Historical patterns suggest an 8.3% gold rebound ahead.
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BTC is holding strong above a technical support, eyeing $150,000 by year’s end.
Gold’s shine is fading fast, just as its “digital” rival, Bitcoin (BTC), recovers lost ground.
Just a week after notching a record above $4,381, the precious metal has retreated by more than 10.60%, sinking to as low as $3,915 on Thursday, its steepest seven-day drop since April.
XAU/USD vs. BTC/USDT daily chart comparison. Source: TradingView
The correction in gold coincides with a nearly 6.70% jump in Bitcoin price, highlighting a sharp divergence as the US and China move closer to a trade agreement.
The shift followed Donald Trump’s remarks about an “amazing meeting” with Xi Jinping on Thursday, in which the two leaders agreed to reduce fentanyl tariffs from 20% to 10%, effective immediately.
With risk appetite improving and crypto markets heating up, could gold’s correction below $4,000 support be a sign that traders are rotating back into Bitcoin in the months ahead?
Bitcoin ETFs attract $839 million amid gold’s plunge
US-listed Bitcoin ETFs have absorbed $839 million in net inflows since gold hit its record high on Oct. 20, with holdings rising consecutively in the last four sessions, data from Farside Investors shows.
US-listed Bitcoin ETFs’ cumulative flows. Source: Farside Investors
In contrast, gold-backed ETFs experienced total outflows of about 1.064 million ounces (nearly $4.1 billion) since Oct. 22, according to Bloomberg data.
This includes the largest one-day withdrawal in over six months on Monday, when investors withdrew 0.448 million ounces of gold exposure.
Gold-backed ETFs net daily inflows. Source: Bloomberg
BTC technicals now indicate a strong floor near $101,790.
BTC/USD weekly chart. Source: TradingView
That aligns with the 20-week exponential moving average (20-week EMA; the green wave) and 1.0 Fibonacci retracement level. Holding above the support confluence increases BTC’s odds of hitting $150,000 by year’s end.
JPMorgan analysts expect the BTC price to reach $165,000 in 2025, arguing that it remains undervalued relative to gold.
Gold hasn’t peaked yet: Analysts
Gold is still up around 50% year-to-date, buoyed by record central-bank purchases, persistent fiscal imbalances, and the ongoing “debasement trade,” where investors seek protection from ballooning government debt and weakening fiat currencies.
Metal trader David Bateman argues that gold’s bull run remains fundamentally intact despite the ongoing correction.
Source: X
Technicals further indicate that gold remains in a bull market correction, with the metal still holding firm above its 50-day exponential moving average (50-day EMA, represented by the red wave).
Gold has bounced from the 50-day EMA support every time in the past two years, resulting in rebounds of 4-33%, as shown below.
XAU/USD daily chart. Source: TradingView
Also, gold’s past 10% corrections over the last three decades have consistently led to sharp rebounds within days, signaling a likely short-term bottom rather than deeper downside.
Related: Bitcoin-gold correlation increases as BTC follows gold’s path to store of value
The previous ten instances of such steep drops all produced positive two-month returns, averaging an 8.3% recovery, according to data highlighted by Sabu Trades.
Gold returns post 10% correction. Source: Sabu Trades
Gold could revisit the $4,200–$4,250 zone by December, effectively retesting its record highs and reaffirming the metal’s broader uptrend, if the pattern holds.
The metal can further hit HSBC’s $5,000 target in 2026 as long as it holds above the red wave.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
