Bitcoin Tumbles as Retail Investors Flock to Gold Amid Rising Inflation Fears

Bitcoin's price dropped to a one-week low on Tuesday as investors turned to gold, which hit its highest level since June 5 at $4,435 per ounce. The precious metal has been attracting attention from retail investors, with the largest US physical gold-backed ETF product seeing inflows of $637 million on August 5.

Data from CryptoQuant showed that Bitcoin's correlation to gold remains strong, even in low time frames. Despite this, BTC/USD continues to be contained by a long-term trend line at $65,827, and investors are keeping an eye on the zone below $66,000 as rangebound behavior persists.

The US Consumer Price Index (CPI) print for July is scheduled for release on Wednesday, which could impact crypto markets. Historically, major US inflation data releases have weakened crypto prices, but last month's soft print sparked daily gains of over 4% in Bitcoin.