Bitcoin Treads Water As Gold, S&P 500 See Significant Gains

Bitcoin (BTC) stayed wedged at $64,000 on Wednesday’s Wall Street open as gold hit six-week highs.

Key points:

• Gold analysis eyes Chinese demand as the precious metal hits its highest levels in six weeks.
• Bitcoin sees a second day of lackluster performance against US stocks as the S&P 500 builds on all-time highs.

China in spotlight as gold rebounds past $4,200

Data from TradingView showed continued BTC price inertia contrasting with upside for both precious metals and US equities.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

Gold gained 2.8% on the day to hit $4,213 per ounce, its highest levels since June 22. Chinese appetite spurred the upside, with Bloomberg reporting 14 consecutive days of inflows for domestic gold-backed exchange-traded funds (ETFs).

China gold ETF inflows data. Source: Bloomberg

These products saw their worst month of outflows on record in June per data from the World Gold Council. The year-to-date inflows to Chinese ETFs fell to 40 billion yuan ($5.6 billion). However, this is still the second-best H1 performance on record.

“Demand for gold ETFs stayed robust amid growing geopolitical and economic uncertainties, while the PBoC’s non-stop gold purchases continued to provide a supportive backdrop for sentiment. Institutional investor participation in Chinese gold ETFs has also risen, supporting demand for these products,” it commented, referencing China’s central bank gold purchases of 82 tonnes over the 20 months through June.

Elsewhere, US stocks remained strong on the day, with the S&P 500 index (SPX) building on Tuesday’s all-time highs to reach 7,793.

S&P 500 one-day chart. Source: Cointelegraph/TradingView

Bloomberg ETF analyst Eric Balchunas noted that 66% of S&P 500 stocks were now above their 50-day moving average, with 57% beating the index’s standard benchmark tracker.

Bitcoin lacks impetus for recovery, analysis shows

As on the previous day, Bitcoin failed to keep up with the broader risk-asset optimism seen in equities. 

Related: Bitcoin price-metric basket sees longest capitulation since FTX blow-up: Glassnode

$64,000 remains a focus on low time frames, and market participants retained prior assumptions about the future of the current bear market.

“As long as the orange support here produces weaker rallies, price will keep forming Lower Highs to produce an eventual breakdown deeper into the $58000-$66000 Range (blue-blue),” trader and analyst Rekt Capital told X followers in comments on the weekly BTC/USD chart.

In research published on Tuesday, onchain analytics platform CryptoQuant highlighted three prerequisites for a durable BTC price rebound to emerge. In addition to sustained inflows to the US spot Bitcoin ETFs, the market needed US bond yields to cool, along with the absence of expected interest-rate hikes by the Federal Reserve.

The Coinbase Premium — the difference in price between Coinbase’s and Binance’s BTC/USDT pairs — also needed to return to positive territory, CryptoQuant wrote, reiterating analysis from June. As Cointelegraph reported recently, the metric has been negative for nearly 80 days.