Bitcoin’s ‘Digital Gold’ Narrative Resurges as Prices Break $87K, Leading to Gains for Other Cryptos
As global markets continue to grapple with economic uncertainty, Bitcoin (BTC) is once again being viewed by some traders as a potential safe-haven asset, reminiscent of its early days when it was referred to as “digital gold.” This renewed interest in Bitcoin comes as gold prices surge and Bitcoin demonstrates resilience amidst a global market sell-off.
On Monday morning in Asia, Bitcoin surged past $87,000, pushing its price higher as major altcoins such as Cardano’s ADA, BNB Chain’s BNB, XRP, and Ether (ETH) experienced gains of up to 1.5%. This rally reversed losses from the previous week, with tokens like Solana’s SOL rising 5.2% over the last seven days.
The ongoing trade wars, fueled by tariff concerns, have raised fears of inflation and currency devaluation, prompting traders to compare Bitcoin to gold’s traditional role as a hedge against economic instability.
“Although Bitcoin has historically been closely correlated with U.S. equities, we’re now seeing a shift as it begins to track more closely with the rise of gold prices, which have been a safe haven as equities have tumbled,” said Nick Ruck, director at LVRG Research, in a message to CoinDesk on Monday. “Bitcoin breaking above $87,000 is a sign of renewed investor confidence as the market stabilizes after tariff-induced panic. The ‘digital gold’ narrative for Bitcoin is gaining traction as both assets have surged together.”
Gold also reached new heights on Monday, surpassing $3,380 per ounce, marking a 25% gain year-to-date. While Bitcoin has fallen more than 20% from its January high of $108,000, Monday’s rise brought it to its highest price since early April, when former President Trump’s “liberation day” sparked market volatility.
As the pressure on the U.S. dollar increases, the dollar index (DXY) hit a three-year low, leading some analysts to suggest that much of the negative news is already priced in, opening the door for potential upside in Bitcoin.
“Trump’s push to remove Jerome Powell as Fed Chair and implement interest rate cuts is causing traders to sell the U.S. dollar and U.S. government debt, seeking refuge in other safe-haven assets like gold, European bonds, and now, Bitcoin,” explained Jeff Mei, COO of BTSE. “When interest rates are cut, more money is pumped into the economy, devaluing the dollar. With downward pressure on the U.S. dollar continuing, Bitcoin could emerge as a go-to safe-haven asset.”
Market Insights
ADA Price Analysis:
- Cardano’s ADA is trading above 63 cents, showing strong technical indicators that suggest continued upward momentum, despite broader market challenges.
- The asset has formed an ascending channel with key support at $0.612, which has held up during multiple retests.
- A notable volume spike occurred on April 21, pushing the price through resistance at $0.630, with Fibonacci extension levels targeting $0.64.
- The Relative Strength Index (RSI) is still below overbought levels, indicating room for further gains.
XRP Price Analysis:
- XRP’s breakout suggests a potential end to months of sideways movement, with technical indicators pointing toward further upward movement.
- Fibonacci levels indicate a possible continuation toward $2.15, with the 61.8% extension pointing to $2.18 as the next key target.
SOL Price Analysis:
- Solana (SOL) has decisively broken above the $135 resistance level, surging 10.2% with strong volume confirmation.
- The key technical battleground is between $129 support and $144 resistance, with 5.75% of realized volume concentrated in this range.
- SOL has formed an ascending channel with higher lows and higher highs, particularly evident in the rally from April 19 to April 21.
- Momentum indicators show bullish divergence, signaling continued strength above the 20-hour moving average.
BNB Price Action:
- Binance Coin (BNB) broke through the $600 barrier, gaining 3.2% as large holders accumulate during market volatility.
- The recent quarterly token burn, removing 1.57 million BNB (worth over $1 billion), has helped fuel price momentum.
- Open interest in BNB rose by 3.3% to $760 million, with 68% of traders betting on continued price increases.
- BNB broke out from its consolidation range, with Fibonacci extension targets suggesting potential movement toward the $605-610 zone if current momentum persists.
