Will BTC react as gold becomes 2nd-Largest reserve?

Bitcoin price is feeling the pressure as gold overtakes the euro to become the second-largest reserve asset in the world. Meanwhile, BTC is just off it’s 200 day simple moving average.

Will these changes contribute to cryptocurrency’s appeal as a form of digital gold, or weaken it?

Current Bitcoin price scenario

Bitcoin price is now trading at around $105,500. BTC has exhibited major volatility in the last few days, with a major risk-off price swing that saw over $1 billion worth of liquidations. BTC also below its 200-day simple moving average (SMA).

U.S. trade tensions and upheaval in the banking sector have lended strength to the demand for gold in the face of bearish conditions thro0ughout the broader finance markets. Gold has overtaken the euro to become the world’s second-largest reserve asset held by central banks, now accounting for around 20% of reserves vs. 16% for the euro.

Upside outlook for Bitcoin price

A recovery could be in the works if broader markets stabilize and ETF demand comes back into the picture. Reclaiming the $112K–$115K zone would be the first bullish trigger, opening a path toward $120K–$125K in a relief move.

Gold’s ascent may paradoxically help BTC by reinforcing the case for alternative, non-sovereign stores of value. Should macro conditions ease or inflation expectations rise again, capital rotation from bullion back into digital assets could reignite the “digital gold” narrative and restore bullish sentiment.

Downside risks for BTC

Conversely, if central banks continue to favor physical bullion over financial assets, capital may keep flowing out of crypto. Sustained ETF outflows or weak liquidity could intensify pressure, especially if global risk aversion deepens.

A clean break below $100K would mark a technical and psychological shift, likely accelerating losses toward $95K–$98K. In that case, Bitcoin’s safe-haven narrative may falter further as investors concentrate on tangible assets rather than digital proxies.

Bitcoin price prediction based on current levels

For now, BTC appears locked in a $100K–$112K consolidation zone. A sustained close above $112K–$115K would shift the short-term outlook bullish, targeting $120K–$125K if macro sentiment steadies. Below $100K, the risk skews toward $95K–$98K, particularly if gold’s reserve dominance keeps absorbing institutional demand.

The market’s next decisive move will likely hinge on whether traders view gold’s rise as a rival, or a reinforcement of Bitcoin’s role as digital sound money.