The Bitcoin price seems poised for a significant decline relative to gold due to recent shifts in the stock market.
Bitcoin’s Break Below Key Gold Support
As of April 22, the BTC/XAU ratio closed below its 50-period exponential moving average (50 EMA) for the first time since April 2022. Historically, this has often indicated a prolonged downtrend. In previous cycles, such as in 2021 and 2022, after an initial bounce, BTC/XAU would break below the 50 EMA and decline towards the 200 EMA, potentially implying a 35% drop.
Historical Correlation Between BTC and USD
Weakness in the BTC/XAU pair can often foreshadow absolute declines in Bitcoin’s price. This trend was notably visible during the 2021-2022 cycle, where the BTC price dropped to $17,000 after a decline in BTC/XAU.
Outlook for Further Changes
If the historical correlation between BTC/XAU and BTC/USD holds, Bitcoin faces a heightened risk of declining toward its 200-week EMA by year’s end, which is currently near $50,950. This presents a cautionary perspective on market developments.
Current market signals suggest a potential significant decline in Bitcoin's value relative to gold, likely stemming from historical patterns observed in the markets.
