Bitcoin Pulls Back as Gold Breaks $4,000 Amid Dollar Strength

Bitcoin and gold have taken divergent paths over the past 24 hours, with the cryptocurrency feeling pressure from a stronger U.S. dollar.

BTC has slipped 2.4% to $121,340 after failing to breach key resistance above $126,000 earlier this week, according to CoinDesk data. The broader Coindesk 20 Index has also fallen, dropping more than 4% to 4,186 points.

The decline coincides with the U.S. Dollar Index (DXY) rising to 98.90—the highest level since August 5. Historically, strength in the dollar tends to weigh on USD-denominated assets, including Bitcoin. Technical charts suggest BTC could test lower support near $118,000 if the current trend persists.

Despite the pullback, Bitcoin’s record highs earlier this week were driven by U.S.-listed spot ETFs, which saw inflows exceeding $3 billion in the week ending Friday.

Gold Rally Accelerates on ETF Inflows

While Bitcoin stalls, gold continues to soar, surpassing $4,000 per ounce for the first time ever. Analysts at ING attribute the rally to a surge in gold-backed exchange-traded fund (ETF) inflows.

“Investors are rapidly adding gold ETFs,” ING noted. “Last week, holdings expanded again, reaching the highest level since September 2022. Although still below the 2020 peak, there’s room for further inflows, which could drive prices even higher.”

Gold prices have doubled over the past two years, fueled by central bank buying as nations diversify away from the U.S. dollar. Geopolitical tensions—including trade conflicts under former President Trump and unrest in the Middle East and Ukraine—have added further upward momentum.

Digital gold tokens, such as PAXG, have also climbed above $4,000, with the combined market capitalization of all gold-backed tokens exceeding $3 billion.