The next price drop for Bitcoin is just waiting in the wings. Whether it will be a big drop down to $80,000 or $74,000 no one knows yet. However, what is becoming interesting is the ratio between Bitcoin and gold. A reversal in favour of Bitcoin could be in sight. Could this correspond with a US dollar bottom?
An intriguing BTC/Gold chart
Source: TradingView
The weekly chart for Bitcoin compared with gold is looking quite intriguing. While $BTC has been in an uptrend against gold through the entirety of its existence, a certain uptrend is in play in the above chart since early 2020. That uptrend has had plenty of peaks and troughs, and it has to be admitted that gold has had the upper hand since mid-December 2024.
Nevertheless, a change in the trend could be on the horizon. While $BTC is continuing to lose strength against gold, it can be seen that a potential pivot point is approaching. The 0.786 Fibonacci level coincides with the ascending trendline at a ratio of 15.7 gold ounces to a Bitcoin. This is also a good structural level as seen by previous ratio values. Look for a potential bounce from this level, and a possible return to Bitcoin ascendency over gold.
A likely descent in the short time frame
Source: TradingView
Back to the BTC/USD chart, it can be seen that the latest little rise for $BTC could turn into a bigger drop. First though, there may still be the possibility of a quick spurt up to the underside of the bear flag in order to confirm the breakdown.
What does look quite likely, is that a descent is going to take place soon. The Stochastic RSI indicators are pointing in this direction after having reached the top. This is also about to be the case in the 8-hour time frame.
Bear targets
Source: TradingView
The daily time frame shows the extent of the measured move from the ascending channel. This would take the price just under $80,000 and would perhaps bring a double bottom into play.
There is also the scenario where the price comes a bit further down and tests the top of the falling wedge. This would put the price at around $73,000 and change. Finally, the horizontal level at $69,000 marks the top of the 2021 bull market, so this would be extremely strong support.
Higher highs and higher lows
Source: TradingView
Zooming right out into the 2-week chart gives one the perspective on either a pivot back to the highs, or a descent to huge structural support at $69,000, or even a plunge to $53,000, which is the full measured move out of the bear flag.
Or, perhaps we could simply say that in the grand scheme of things, the $BTC price has continued to make higher highs and higher lows since its inception. Why would this change now?
Bitcoin has been beaten down for nearly 4 months. A change is due. Yes, that change could be a new leg down to $69,000, but it could also be a rally back to the upside. If the bears can’t force the price down by the end of this week, could a rally become the favoured outcome?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.