The recent decline in gold prices has sparked a debate among analysts about the potential impact on Bitcoin’s price. According to several analysts, the ongoing decline in gold prices could trigger a Bitcoin rally. This inverse relationship between the two assets has been observed in the past, with Bitcoin often benefiting from a decline in gold prices.
Bitcoin’s Potential Rally
Based on technical analysis, a rise to $150,000-$165,000 is still possible by year-end. This prediction is supported by the fact that Bitcoin’s daily relative strength index (RSI) readings have been consistently below 30, indicating that the asset is oversold and due for a rally. The Bitcoin to Gold ratio has also fallen to levels that have been associated with market bottoms in the past, most recently in 2015, 2018, 2020, and 2022. Each time, Bitcoin has followed with a rise of between 100% and 600%.
XAU/USD daily chart. Source: TradingView
Gold’s Record High and Potential Impact on Bitcoin
Gold prices have risen by over 62.25% since the beginning of the year, with the precious metal hitting an all-time high of around $4,380 an ounce on Friday. However, the daily RSI readings have been consistently above 70 over the past month, suggesting that the asset is overbought and at risk of profit-taking. This could lead to a decline in gold prices, which in turn could trigger a Bitcoin rally.
BTC/USD daily chart. Source: TradingView
Analysts’ Predictions
Analyst Pat has predicted a “generational low” for Bitcoin, citing its performance relative to gold over the past four years. The Bitcoin to Gold ratio has fallen to levels that have been associated with market bottoms in the past, most recently in 2015, 2018, 2020, and 2022. Each time, Bitcoin has followed with a rise of between 100% and 600%.
BTC/XAU 1-week chart. Source: Pat/TradingView
HSBC’s Bullish Outlook on Gold
Contrary to growing views that gold’s record rise could be moderating, HSBC has doubled down on its bullish outlook, forecasting that the precious metal could rise to as much as $5,000 an ounce by 2026. The bank based the optimistic outlook on geopolitical tensions, economic uncertainty, and a weaker U.S. dollar, which it said would keep demand strong.
Source: X
Bitcoin’s Prospects
Bitcoin’s own prospects remain extremely optimistic. JPMorgan analysts expect BTC to reach $165,000 in 2025, arguing that it remains undervalued compared to gold. Similarly, analyst Charles Edwards noted that a decisive break above $120,000 could push BTC toward $150,000 “very quickly.”
XAU/USD daily chart. Source: TradingView
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks, and readers should conduct their own research when making their decision. For more information, visit https://cointelegraph.com/news/can-bitcoin-recover-gold-plunges-from-record-highs?utm_source=rss_feed&utm_medium=rss_category_market-analysis&utm_campaign=rss_partner_inbound
