Gold and Bitcoin: a new coalition against the dollar

XAU/USD

Key zone: 4,450.00 - 4,550.00

Buy: 4,580.00 (on strong positive fundamentals); target 4,800-4,850; StopLoss 4,500.00

Sell: 4,350.00 (on a pullback after retesting 4,400); target 4,150-4,100; StopLoss 4,450.00

BTC is looking less and less like a technology bet and increasingly like “gold with high beta.” The Treasury sell-off, U.S. debt risks, and a weak dollar pushed XAU/USD above $4,500. Now the market is deciding whether this will mark the beginning of a new stage in the gold rally.

The correlation between BTC and gold has reached a high: U.S. debt risk, a weak dollar, and pressure on Treasuries are forcing investors to buy scarce assets. For XAU/USD, a sustained move above $4,500–4,550 would open the way to a new stage of growth./p>

An unusual macroeconomic setup is forming in the global market.

The 90-day correlation between Bitcoin and gold rose to approximately 0.55 by the end of August: comparable levels were last seen in 2020 following the launch of large-scale fiscal and monetary stimulus programs.

The shift happened quickly: after the U.S. Treasury announced an expansion of operations in the long-term Treasury market, Bitcoin gained 22.4% in one week — its best weekly performance since March 2024. Gold rose by approximately 5% over the same period, while stocks declined.

But investors have now started buying both assets for the same reason — as protection against the potential debasement of fiat money and deterioration in the quality of sovereign debt.

A reminder:

The correlation coefficient measures the degree to which assets move in sync. A BTC–Gold correlation of around 0.55 looks particularly interesting in the context of Bitcoin’s history. Under normal conditions, BTC is significantly more closely linked to risk assets than to gold. In addition, BTC’s relationship with DXY remains distinctly negative.

The market has effectively started trading a new formula:

Dollar and sovereign debt under pressure → gold rises → Bitcoin rises alongside gold, but significantly faster.

Bitcoin is now being perceived as a more aggressive version of gold. As concerns about currency debasement intensify, the limited supply of both assets becomes an investment argument.

Bitcoin reacts much more strongly to changes in capital flows. Therefore, the same macroeconomic impulse can give gold +5%, while BTC gains +20% or more. High correlation does not mean equal risk.

The source of the current move is not in the cryptocurrency market or even in the gold market — it is in Treasuries.

Normally, high bond yields are negative for gold. But a more complex mechanism is now emerging. If yields rise because of tighter Fed policy and higher real rates, this is indeed negative for XAU/USD.

However, if long-term bond yields rise because of:

• Enormous sovereign debt supply;
• Budget deficits;
• Inflation concerns;
• Declining confidence in the long-term U.S. debt trajectory,

then gold can rise simultaneously with nominal yields.

When BTC and gold rise at the same time while the dollar declines, the market is effectively voting against fiat and debt risk simultaneously through two independent scarce assets.

So, What Does This Mean?

For gold, the situation remains fundamentally favorable as long as investors perceive the problem as a fiscal and currency risk rather than simply as a need for additional Fed rate hikes.

Bitcoin helps determine how broadly the market is trading the bullish scenario. If BTC and gold rise simultaneously while DXY is weak, the debasement trade receives additional confirmation.

But the trading decision on XAU/USD should primarily be based on the following combination:

Gold + DXY + real Treasury yields + Fed expectations.

From a technical perspective, the decisive test is now in the $4,500–4,550 zone. A sustained move above it could trigger the next wave toward $4,600 and $4,700–4,750, after which the market could seriously test the $5,000-per-ounce scenario.

A drop below $4,350, especially if accompanied by a simultaneous rise in DXY and real yields, would mean that the macroeconomic setup has begun to break down.

The main conclusion: the record correlation between BTC and gold is not a signal to buy Bitcoin. For a gold trader, it is a signal that the market is increasingly hedging against U.S. debt and currency risk. As long as this regime remains in place, the strategic advantage stays with XAU/USD buyers.

So we act wisely and avoid unnecessary risks.

Profits to y’all!