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Bitcoin’s Value Relative to Gold May Drop 35% Due to Historical Bear Market Signals

Bitcoin’s Value Relative to Gold May Drop 35% Due to Historical Bear Market Signals

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by Giorgi Kostiuk

a month ago


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.

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