Gold vs. Bitcoin: Institutional BTC Demand Grows as XAUUSD Breaks Out

Bitcoin (BTC) consolidates above $110,000 and forms a bullish price structure as expectations for Federal Reserve rate cuts increase. The August Nonfarm Payrolls report showed only 22,000 jobs were added, well below expectations. Moreover, the unemployment rate increased to 4.3%, and wage inflation slowed to 3.7% year-over-year.

These weak labour indicators have strengthened the case for rate cuts this year, boosting investor appetite for risk assets like Bitcoin. The price is consolidating within a bullish setup and awaits upcoming inflation data to determine its next move.

Moreover, a strong rise in institutional demand supports the bullish structure in the Bitcoin market. Japanese firm Metaplanet added 136 BTC to its reserves, while El Salvador purchased 21 BTC to mark the anniversary of its Bitcoin law.

Additionally, Bitcoin spot ETFs recorded $246 million in inflows last week, marking a second consecutive week of positive flows. The trend of inflows reflects growing confidence in Bitcoin’s long-term potential.

On the other hand, gold (XAUUSD) is also benefiting from macro tailwinds. The price broke the record level of $3,500 and reached over $3,650 in September. The ongoing bullish momentum in the gold market supports the rally in Bitcoin, as the Bitcoin-to-gold ratio approaches a key level.

Bitcoin vs. Gold Ratio Highlights Shifting Market Cycles

The gold-to-Bitcoin ratio has been trading within a descending channel for the past decade. Each time the ratio touched the channel’s resistance, Bitcoin prices bottomed, and gold entered a rally. Similar patterns appeared in 2015, 2020, and 2022. In April 2025, the ratio again hit the resistance, triggering a strong surge in gold and marking a bottom for Bitcoin.

However, the ratio rebounded from the 0.026 support level in August 2025 and is now approaching the channel resistance again in September. This setup suggests that Bitcoin may form another bottom. If the price confirms the bottom, it could trigger the next major leg higher in Bitcoin prices. This historical pattern in the ratio points to a potential breakout for Bitcoin as seen in past cycles.

The Bitcoin-to-Gold ratio tells a similar story. The ratio has been trending higher over the past decade within a bullish price structure. Currently, the ratio is trading near the neckline of an inverted head and shoulders pattern.

A clear break above the 41 level in this ratio could spark another strong surge in Bitcoin. The recent drop in the ratio in September 2025 is due to gold’s rally above the $3,500 region.

Bitcoin Consolidates Near $115K Ahead of Potential Breakout

The weekly chart for Bitcoin shows price consolidation around the key zone of $105K to $115K. Bitcoin briefly broke above the $115K level but failed to hold and started consolidating near that region. This price action highlights the significance of this level in Bitcoin’s history.

If Bitcoin breaks above this resistance decisively, the next move could be much higher than recent levels. The formation of a cup pattern, along with an ascending broadening wedge, supports a strong bullish outlook. A breakout above this zone will likely trigger the next major rally in Bitcoin to target $140,000 and $250,000.

Gold Breaks Out as Technical Structure Supports $4,000 Target

The weekly chart for gold shows a breakout above the key $3,500 level after a 4-month bullish continuation pattern. The strong consolidation between $3,200 and $3,500 signals intense price compression. This breakout suggests gold could move significantly higher in the coming weeks.

The measured target from the $3,000 base points toward the $4,000 level, as indicated by the ascending broadening wedge pattern on the daily chart below. Therefore, investors can consider buying gold on any dips to target $4,000.