Gold releases three key signals, Bitcoin price may be approaching the cyclical bottom

BTC-1,42%

After the gold price hit a historic high and experienced a short-term correction, Bitcoin continued to consolidate during its strongest quarter on record, sparking widespread market discussion about its short-term trend. However, several analysts point out that macro, statistical, and technical signals from the gold market are hinting that Bitcoin’s price may be approaching a bottom, setting the stage for the next rally.

From a macro perspective, historical data shows that gold and silver often lead Bitcoin to peak. After the global market plunged in March 2020, the Federal Reserve unleashed massive liquidity, with funds first flowing into safe-haven assets, driving gold and silver sharply higher in August of that year, while Bitcoin remained range-bound for an extended period. Subsequently, as precious metals peaked and declined, risk appetite rebounded, and Bitcoin entered a rapid upward phase. The current environment is highly similar to that period: gold prices near all-time highs, silver strengthening in tandem, while Bitcoin remains sideways. This rhythm is seen as a typical “cycle prelude.”

On a statistical level, the correlation between Bitcoin and gold, as well as US stocks, is significantly decreasing. Analysts believe that this decoupling has often occurred near Bitcoin’s important bottom zones in history, often followed by medium- to long-term upward trends. Despite ongoing changes in market structure, this signal is still viewed as a potential trend reversal indicator.

From a technical standpoint, the RSI of the Bitcoin/gold ratio has again touched the long-term downtrend line. Similar situations occurred at bear market bottoms in 2011, 2015, 2018, and 2022, after which Bitcoin outperformed gold again. If this historical pattern continues, the current formation may indicate that Bitcoin is in a transition zone from weakness to strength.

In summary, the gold trend, asset correlation changes, and technical signals from the Bitcoin-to-gold ratio collectively point to a possibility: the current sideways movement in Bitcoin is not the start of a new bear market, but rather a consolidation near a cycle bottom. Once the precious metals rally slows and liquidity and risk appetite return, the crypto market may usher in a new upward phase.

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