Bitcoin Tests Support as Gold Rally Falls Flat, Falls to FOMC Lows

Gold, BTC/USD Talking Points:

• The past two weeks are non-ideal environments for non-yielding assets like gold and Bitcoin. Treasury yields are surging and even though stocks have held up relatively well so far, there’s less reason for buyers to hit the bid in markets like XAU/USD or BTC/USD.
• Nonetheless, Bitcoin set a fresh high earlier this week, even as gold prices remain on their back foot.

When a market should go down but doesn’t, something is up, and that something could be impactful for what lies ahead than what we already know. That’s the story in Bitcoin right now as the rally is now more than a month old following the massive breakout triggered by the larger Treasury buyback announcement from Scott Bessent. Interestingly, gold had already broken out at that point and the announcement provided a similar bullish prod, although it was lesser in gold than BTC.

But while gold topped shortly after that move, Bitcoin has continued to power higher, even in a backdrop that usually wouldn’t be supportive of such. With US yields surging and continuing that run today, going along with a more hawkish FOMC, gold has continued to draw down. But Bitcoin has just continued to rally.

And even at this point there’s a clear disparity as gold is down for a test of the FOMC lows while Bitcoin is testing a major spot of support.

Gold Re-Tests FOMC Lows, Daily Chart

Chart prepared by James Stanley; data derived from Tradingview

Gold Descending Triangle

While it’s not too late at this point, given that we have seen the sell-off stall above last week’s low, which goes along with a green weekly bar from last week for gold, there is a bearish setup in the metal right now that could be justified for a break and test of fresh lows.

The lower highs over the past three weeks are meaningful, especially with last week’s hold at 4400 and this week’s hold at 4360. While horizontal support isn’t as solid as one would prefer for such formations, the fact that sellers have gotten increasingly more aggressive on bounces highlights that, eventually, that support could give way and that points to a push towards the 4100 zone, which was resistance back in July before the post-FOMC breakout.

Gold Four-Hour Chart

Chart prepared by James Stanley; data derived from Tradingview

Bitcoin

There have been multiple prior periods where Bitcoin has outperformed gold, as if the world’s preference for an anti-fiat vehicle suddenly shifted. I talked about this in the article yesterday, highlighting specific periods in 2020 and 2024 where gold slumped and Bitcoin broke out in a very big way.

That’s started to happen again, and even as gold has slid from the highs after that pop from the Treasury buyback announcement, Bitcoin has continued to gain ground with another fresh high posting earlier this week.

So far, there’s been a three-day pullback from that high and at this point, BTC/USD is testing a big spot of support as taken from prior resistance – the same swing that set the high back in May of this year.

BTC/USD Daily Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Market Analyst, Global Macro