Bitcoin Faces Pressure as Gold Surges Past $4,000 Amid Strong Dollar Rally

Bitcoin (BTC) has slipped 2.4% to $121,340 over the past 24 hours after failing to sustain momentum above $126,000 earlier this week, according to CoinDesk data. The CoinDesk 20 Index also dropped over 4% to 4,186 points. The correction comes as the U.S. dollar index (DXY) climbed to 98.90 — its highest level since August 5 — signaling renewed dollar strength that typically weighs on USD-denominated assets such as Bitcoin and gold. Analysts note that BTC could face further downside pressure, with charts suggesting a possible dip toward $118,000.

Bitcoin’s recent rally to a record high above $126,000 had been fueled by robust inflows into U.S.-listed spot Bitcoin ETFs, which collectively attracted more than $3 billion last week. However, the stronger greenback and profit-taking among investors appear to have cooled the momentum.

While Bitcoin’s surge has stalled, gold (XAU) continues to outperform. The yellow metal broke past $4,000 per ounce for the first time in history, buoyed by record inflows into gold-backed exchange-traded funds (ETFs). Analysts at ING attribute the rally to rapid ETF accumulation, noting that holdings have reached their highest level since September 2022 and could continue to rise toward the 2020 peak.

Gold prices have doubled in the past two years as central banks diversify away from the U.S. dollar amid geopolitical tensions — including conflicts in the Middle East and Ukraine — and trade uncertainties under former President Donald Trump’s policies. Tokenized gold assets such as PAX Gold (PAXG) and Tether Gold (XAUT) have mirrored this trend, each surpassing $4,000. The combined market capitalization of gold-backed tokens now exceeds $3 billion, reflecting growing investor demand for digital exposure to traditional safe-haven assets.