As Bitcoin consolidates below the $90,000 threshold, market observers are evaluating potential catalysts that could drive the cryptocurrency's price higher. From a macroeconomic perspective, treasury yields are rising while the probability of an October rate hike dropped to 17% from 75% days prior. Despite cautious investor sentiment and continued hedging into safe havens, Bitcoin's macro relevance remains prominent.
Data from the Kobeissi Letter highlights a weaker-than-expected September jobs report, a two-month downward revision of 60,000 jobs, and weaker PCE inflation data, alongside persistent strength in the 10-year note yield. Concurrently, the BTC/XAU ratio has been pushing higher, approaching a significant breakout level for the second time since a rotation began in mid-August.
According to analysts, liquidity resulting from a rotation out of gold and into Bitcoin could serve as a catalyst for a breakout. Fidelity Director of Global Macro Jurrien Timmer noted that Bitcoin looks particularly interesting at current levels, noting its macro-hedge appeal and status as a useful diversifier given its low correlation with the S&P 500 and treasuries.
From a technical standpoint, the BTC/XAU ratio finished the third quarter up more than 37%, marking its strongest quarterly gain since the election-driven rally in the fourth quarter of 2024. Because Bitcoin's correlation with Treasury yields is lower than that of gold, the asset stands to benefit from capital rotation, reinforcing the BTC/XAU ratio.
