Bitcoin Hit’s a New All Time High Before Pulling Back

Something extraordinary is happening across global markets. Gold, Bitcoin, and equities — assets that historically move in opposite directions — are all smashing through all-time highs simultaneously. This isn’t just a bullish streak; it’s the market quietly screaming: the monetary regime is shifting.

Bitcoin surged past $125,000 to a new all time-high over the weekend before pulling back to $123,000. Gold is flirting with $4,000 an ounce. The S&P 500 has exploded over 40% in just six months. And the common thread weaving this upside party together? A US dollar heading for its worst year since disco was still on the radio — 1973.

Bitcoin pulled back to $123,000 on Sunday, Source: BNC

According to analysts at The Kobeissi Letter, the greenback has already shed more than 10% this year and has lost 40% of its purchasing power since 2000. “The correlation coefficient between gold and the S&P 500 reached a record 0.91 in 2024,” they note — a bizarre alignment between safe havens and risk assets that signals a “new monetary policy era.” Translation: markets no longer believe the Fed can protect the dollar while supporting the economy. So investors are piling into everything else.

The Perfect Storm: Inflation, Cuts, and Dysfunction

The backdrop reads like a financial thriller: a US government shutdown grinding regulators to a halt, sharply revised job numbers pointing to a weakening labor market, and the Federal Reserve cutting interest rates even as inflation ticks back up. Investors aren’t buying the “soft landing” narrative anymore — they’re hedging against a system losing credibility.

“Political dysfunction has renewed investor interest in BTC as a store-of-value monetary technology,” says Fabian Dori, CIO at Sygnum Bank. With Washington literally closed for business, Bitcoin starts looking less like a speculative play and more like an insurance policy.

Meanwhile, ETF flows are going haywire in the best possible way. US-listed Bitcoin ETFs just logged their second-strongest week of inflows ever — $3.24 billion — nearly matching the November 2024 record. That’s a staggering turnaround from the $902 million in outflows the previous week, fueled by expectations of more Fed rate cuts. According to Nexo analyst Iliya Kalchev, at the current pace, Q4 ETF flows could retire over 100,000 BTC from circulation — twice the new issuance rate.

Uptober Is Doing Its Thing

October has historically been Bitcoin’s second-best month, nicknamed “Uptober” by crypto diehards. And this year, the stars are aligning: dovish macro conditions, seasonal strength, and ETF demand all hitting at once. BTC briefly tapped $123,996 on Friday — the highest level since mid-August — before the inevitable weekend retrace.

Still, not everyone’s popping champagne yet. Some traders see the recent surge as “bait” for longs, noting passive shorts are piling in around the $124k zone. CrypNuevo, another analyst, expects a healthy pullback to the 4-hour 50 EMA — roughly $118,000 — before the next leg higher. Rekt Capital reminds us that the last rejection at this level led to a 13% dip. History may not repeat, but it often rhymes.

Bitcoin seasonality shows October is the second strongest month for Bitcoin, Source: X

The Bigger Picture: Generational Shift

If this feels different, that’s because it is. The unusual co-movement of gold, Bitcoin, and equities isn’t a coincidence. It reflects a market waking up to a once-in-a-generation shift: a structurally weaker dollar, an aging monetary toolkit, and the rise of parallel financial rails. Investors aren’t choosing between safe and risky assets anymore — they’re choosing between dollar exposure and non-dollar exposure.

Bitcoin’s bull run isn’t happening in a vacuum. It’s being turbocharged by a macro landscape that looks increasingly like the 1970s — minus the bell-bottoms. Except this time, instead of gold alone, we’ve got a digital hard asset with global liquidity and no central issuer.

As Jerome Powell prepares to speak and the FOMC minutes loom, all eyes are on the Fed. But it seems the market has already made up its mind. Is now the time to buy Bitcoin?