Bitcoin mirrors the 2024 gold rush, as Bitcoin approaches a breakout following a liquidity and adoption surge. Is the playbook pump of BTC triggering a new all-time high?
Bitcoin is secretly following the 2024 breakout pattern of gold. Gold had left a multi-year ascending wedge last year and increased in value twofold in less than a year and a half.
Bitcoin has already taken up the same technical framework, as it is nearing the breakout area that triggered the rally of gold.
The recent rally of gold has leveled off and is now almost 9% below its high point. In the past, this marked the beginning of profit rotation, as the capital would be shifted out of gold (slow-hedge assets) and into high-beta investments, such as Bitcoin.
The start of significant Bitcoin bull legs during earlier cycles has always been characterized by that movement.
Source X BullTheoryio
The existing structure of Bitcoin is in line with macroeconomic indicators. The Federal Reserve is intending to cut interest rates by 25 basis points, as quantitative tightening is terminating.
These events push up liquidity and provide good conditions for Bitcoin rallies, as it has happened before. As opposed to the defensive movement of gold due to the fear of debasing the currency and buying by the central bank, the movement of Bitcoin is offensive.
It is driven by inflows of liquidity, the increasing adoption, and institutional demand. Bitcoin is not merely a store of value anymore, but it seeks to be a value creation leader.
This shift of gold to Bitcoin happens after each market cycle. The first step that gold rallies can take is when investors want to be safe against policy risks.
When the liquidity comes back, investors redirect their attention to assets with greater velocity, such as Bitcoin, to grow. This transition occurred in 2020 following the pandemic and appears to reoccur now.
The market sentiment is positive but unstable. The Bitcoin price has reached its high of $116,000 and then slightly dropped, retaining the optimistic price of above $113,000.
The altcoins, such as Ethereum, are also holding, and it can be argued that there could be a final pump and then a phase of alt-season boom.
This positive relationship is reflective of gold hitting new milestones to an unprecedented high, thus indicating that Bitcoin is soon to hit a new all-time high.
The traders are also monitoring the key resistance of around $125,000, and a good close above 118,000 will prove continuity of the bullish trend.
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