As Bitcoin [BTC] consolidates below $90k, the important question is what could eventually push the price higher.
Interestingly enough, a catalyst may already be in place. From a macro perspective, the yields on treasuries are rising, and the probability of a rate hike in October has plummeted to 17% from 75% a few days ago. Nonetheless, the risk appetite remains repressed, and investors are still hedging into safe havens. In other words, liquidity is still cautious.
As analysts at the Kobeissi Letter note:
We just got a weaker than expected September jobs report, a 2-month downward revision of -60,000 jobs, and weaker than expected PCE inflation data. Meanwhile, the 10Y Note Yield can’t even hold a decline for more than one hour. The bond market is not messing around.
However, looking closer at the situation, it becomes apparent that the relevance of Bitcoin on the macro level is far from being over. As seen on the chart below, the BTC/XAU ratio is pushing higher and looks ready to break above a significant level, which would be the second time since the rotation started in mid-August.
According to AMBCrypto, the liquidity from this rotation could be the catalyst that propels Bitcoin towards $90k. With FOMC related FUD keeping volatility high, a rotation from gold to BTC could provide the liquidity required for a breakout, a view is shared by Jurrien Timmer, Director of Global Macro at Fidelity.
Bitcoin’s macro hedge appeal puts $90k back in focus
When it comes to FOMO, the setup makes it clear why Bitcoin is seeing increased preference over gold.
From a technical lens, the BTC/XAU ratio ended Q3 up 37%+ higher, making it the best quarterly gain since the Q4 2024 election-driven rally. Thus, the BTC price against gold reached a critical level, reaffirming Bitcoin’s status as a macro-hedge. Jurrien Timmer, Fidelity’s Director of Global Macro, highlighted this shift:
I continue to like exposure to both gold and Bitcoin, but especially Bitcoin looks interesting to me at these levels, where we broke out above $80k, targeting $100k.
Interestingly enough, it appears that his BTC preference goes beyond gold. As the post below highlights, Bitcoin only has around a 30% correlation with the S&P 500 and is mostly uncorrelated with treasuries. This makes Bitcoin a useful diversifier if a new four-year cycle is starting to emerge.
In short, since BTC’s correlation with Treasury yields is lower than that of gold, the asset appears to benefit from the rotation and strengthen the BTC/XAU ratio.
Therefore, if the tendency persists, the BTC/XAU breakout could act as an essential liquidity marker. Especially considering that the macro environment remains volatile, Bitcoin’s strength against gold may well enable another $90k leap.
Final Summary
- BTC is gaining strength against gold as money rotates back into Bitcoin.
- A BTC/XAU breakout could add liquidity and support a move toward $90k.