Bitcoin vs. Gold: Is This the Perfect Storm for BTC Price Next Rally?

Gold has been underperforming against Bitcoin (BTC) price since January 2023, marking a continuous downtrend in the GOLD/BTC ratio.

Bitcoin’s dominance has strengthened over time, with historical data showing that each time gold tested its 200-day Exponential Moving Average (EMA), BTC surged in response.

The fifth retest of this critical level is now approaching.  Notably, market indicators suggest strong institutional demand for Bitcoin, aligning with past breakout patterns.

BTC Price Reaction to Gold’s 200-Day EMA Tests

Market analyst Mr. Anderson has highlighted Bitcoin’s historical price movements in relation to gold’s performance.

Over the past two years, gold has tested its 200-day EMA four times, with each test marking a turning point where gold weakened and Bitcoin price surged.

The GOLD/BTC chart reveals a recurring pattern, where Bitcoin’s price action strengthens after gold reaches this key level.

Since January 2023, gold price has maintained a steady decline against BTC price , despite achieving new highs in the traditional markets. Bitcoin price, on the other hand, has continued its upward trend, currently trading near the $86K mark.

The fifth test of gold’s 200-day EMA is now underway, mirroring previous conditions that led to Bitcoin price rallies. Analysts tracking this trend consider it a key level in determining the next phase of BTC price movement.

Institutional Inflows Signal Strong Demand

The latest market data reveals that BTC spot ETFs recorded a $495 million inflow this week, indicating rising institutional interest in Bitcoin.

This level of demand was last observed in the period following the FTX market crash, which led to a prolonged BTC price rally.

Investors continue to increase their exposure to BTC, aligning with the broader trend of institutions favoring Bitcoin over gold as a store of value.

Market demand from institutions has remained one of the key influencers of Bitcoin’s prices as fund inflows have been previously linked to the bull runs.

BTC continues to gain more popularity over gold hence the downward trend of the GOLD/BTC. At this rate, institutional investments will provide significant support to BTC price to maintain its dominance over gold.

Gold’s RSI Divergence and Bitcoin’s Strength

Moving average and other technical factors also confirm the strength of Bitcoin against gold.

Furthermore, gold’s RSI is also bearish, indicating that it may struggle to sustain the recent higher high formation.

The SPDR Gold Shares (GLD) has incorporated a bearish trend reversal indicator in the shape of a Relative Strength Index or RSI.

Bitcoin’s past pattern also correlates well with these signals as gold’s RSI divergence has remained in alignment with BTC price bullish runs.

The market data indicates that the Bitcoin price remains quite stable, which was positively impacted by gold’s slowdown in gains.

RSI divergence and multiple EMA crossovers imply a bullish turn of events in regard to Bitcoin from the investors’ side.

Gold to Bitcoin ratio is still relevant regarding BTC price fluctuations. In the past, Bitcoin price has always risen above the 200-Day EMA to achieve better performance compared to gold, making BTC price more dominant in the market.