In the early hours of Saturday, the cryptocurrency market faced a sharp downturn, triggering nearly $700 billion in liquidations. Amid this turbulence, gold-backed cryptocurrencies stood out for their resilience, though indicators suggest the recent rally may be losing steam. Bitcoin ($114,031), Ethereum ($4,104), and major altcoins suffered steep declines, while PAXG and XAUT remained near record highs as gold approached new peaks. A cautious return by market makers, combined with weekend ETF closures and tightening liquidity, points toward a slow and steady recovery.
During the sell-off frenzy, Bitcoin plunged 8.5% within 24 hours, and the index tracking the top 20 cryptocurrencies fell 12.75%. In contrast, Paxos’ PAXG dipped just 0.23% to around $3,998, while Tether’s XAUT edged up 0.2% to $4,010. Both tokens are backed by physical gold reserves, mirroring the metal’s weekly close near $4,018 per ounce. Gold has gained over 50% since the start of the year, underscoring its “safe haven” appeal during financial volatility. As transparency in reserve structures improves and on-chain issuance aligns with institutional standards, the store-of-value mechanism of these assets strengthens. Still, the crypto ecosystem requires careful oversight of custody and redemption procedures, along with issuer-related risks.
According to the World Gold Council’s Markets Monitor, the eight-week rally has pushed gold into overbought territory across daily, weekly, and monthly timeframes. Prices near $4,023 roughly 25% above the 40-week average signal a typical overextension, suggesting consolidation or correction ahead. While net long positions remain elevated, they have not yet reached extreme levels.
In the broader crypto market, analysts expect bottom formation to take time. Narrowing liquidity channels, the absence of ETF activity over the weekend, and risk-averse market makers all point to a gradual rebound. Meanwhile, escalating U.S.–China trade tensions may increase risk premiums and delay market recovery. In this context, a slowdown in gold-linked asset gains could help stabilize overall crypto volatility.