Bitcoin and gold (XAU) have diverged over the past 24 hours, with BTC likely feeling pressure from a strengthening dollar index.
The leading cryptocurrency by market value has fallen 2.4% to $121,340, after failing to break key resistance above $126,000 earlier this week, according to data from Coindesk. The Coindesk 20 index has decreased by more than 4% to 4,186 points.
The decline comes as the dollar index, which tracks the Greenback exchange rate against a basket of fiat currencies, rose to 98.90, the highest level since August 5.
The strength in the DXY generally weighs on USD-denominated assets such as BTC and Gold. The BTC price chart suggests a scope for a deeper decline to $118,000.
BTC hit a record high of over $126,000 earlier this week as US listed Spot ETFs made over $3 billion in the week ending Friday.
Gold boosted by ETF inflows
While the BTC rally has stalled, gold shows no signs of slowing down as its price per ounce has risen above $4,000 for the first time in its history.
According to ING, the recent rally is catalyzed by an increase in inflows into gold-linked exchange-traded funds (ETFs).
“Investors are adding gold ETFs at a rapid pace. Last week, gold-backed exchange-traded funds expanded again, taking total gold ETF holdings to the highest level since September 2022. There is still room for additional additions, given that the current total remains shy of a 2020 peak. More additions could push gold even higher,” Ing analysts said.
Prices have doubled in two years, driven by central banks buying the yellow metal to diversify away from the US dollar. President Donald Trump’s aggressive trade policy and conflicts in the Middle East and Ukraine have added to the bullish momentum.
Gold-backed tokens like Paxg (Paxg) They have also risen above $4,000. The combined market value of all gold tokens has risen above $3 billion.
