Time to rethink the ‘digital gold’ narrative as | Australian Markets

The world’s hottest cryptocurrency, Bitcoin, has led Sunday’s digital coin selloff, dipping beneath its US$79,000 to US$80,000 assist degree – a place it has held for the previous month regardless of wider market ructions – as volatility grips crypto markets and investor sentiment shifts to ‘risk-off’.

Bitcoin is at present trading at US$76,869 per coin, down practically 12% on the month-to-date.

This decline has been notably galling for Australian crypto traders, with the AUD’s underperformance towards the USD and Euro exacerbating losses.

For Charlie Sherry, head of finance and a crypto analyst at trading platform BTC Markets, Bitcoin’s Sunday selloff was “unsurprising”, provided that it occurred at “a time when global markets are generally more illiquid”.

“As a result, a few large selloffs can have a disproportionate impact, pushing prices down quickly.”

Like the mass equities selloff, the set off for the crypto retreat is “no mystery”, in accordance to Sherry, being a direct response to the Trump Administration’s tariff agenda, which is bulldozing longstanding trade relationships.

“For a moment, it seemed as though crypto might hold steady, but with the 24/7 nature of crypto markets, investors woke up on Sunday in full ‘sell mode’,” Sherry stated.

Trailing the path of equities sell-off, with the S&P 500 additionally dropping 10% over the final week, Bitcoin is exhibiting an more and more sturdy correlation with risk property, he famous – hardly the protected haven holding it’s usually touted as by its most ardent evangelists.

Gold, seen as the “traditional safe-haven asset” in instances of financial tumult, surged to US$3,167 at the finish of the Q1 – up practically 18% over the quarter. For Sherry, this divergence undermines the narrative that Bitcoin can and must be regarded as a digital analogue of gold holdings.

“Bitcoin hasn’t seen the same kind of demand that gold has, despite both assets sharing similar characteristics.”

According to some estimates, Bitcoin’s average annual volatility over the previous decade sits at 46.31%; this contrasts sharply with gold’s 15.44% volatility score over the previous 30 years.

Sherry notes that crypto investor sentiment has taken a “decidedly cautious turn”, now sitting within the ‘extreme fear’ vary of the Crypto Fear & Greed Index.

“This suggests a sense of trepidation among crypto investors as they weigh the broader economic uncertainties.”

Triggers for a Bitcoin breakout

Bitcoin’s sub US$79,000 decline – more than half the worth of its pre-Trump inauguration high-water mark of US$167,170 per coin hit on 18 January 2025 – marks “the bottom of the range after the all-time-high pullback”, Sherry stated.

The subsequent key assist lies round $72,000 – the pre-Trump election high level.

Sherry notes two key breakout triggers for Bitcoin traders to watch for:

• Bitcoin would need to reclaim the $80,000 degree with power to invalidate the present breakdown. However, this appears unlikely given the present market atmosphere.
• A possible shift in Trump’s stance or emergency intervention by the Fed might present some much-needed reduction for the markets.

“As the markets remain highly sensitive to macroeconomic and geopolitical events, Bitcoin’s ability to reclaim the $80,000 threshold and hold it will likely dictate the next phase of its price movement. Until then, volatility is expected to remain a prominent feature of the market,” he concluded.