Evaluating the Bitcoin-gold cycle that could spark BTC’s breakout

Key Takeaways

Bitcoin has entered a consolidation phase as its correlation with altcoins weakens, an early signal of potential volatility. Meanwhile, gold continues to climb, and emerging patterns suggest that a Bitcoin breakout may only follow once gold reaches its peak.

Galaxy Digital’s recent move to offload 1,800 Bitcoin [BTC] has grabbed eyeballs, coming at a time when BTC’s usual correlation with altcoins appears to be fading.

Meanwhile, gold continues its upward climb while Bitcoin stays in retracement mode. Could BTC be setting itself up for a breakout rally once gold’s momentum cools off?

Of falling correlation and volatility

Galaxy Digital’s outflow of 1,800 BTC arrived as Bitcoin’s correlation with altcoins eased. Mind you, that is a trend that often hints at upcoming market swings.

Source: X

When altcoin correlation with BTC drops, volatility usually follows.

Typically, this happens when Bitcoin moves sideways in a range, letting altcoins rally briefly before BTC “pulls the rug” and drags them back down.

Source: Alphractal

Conversely, during a strong BTC downtrend, correlations rise again as altcoins fall in line with Bitcoin’s trajectory.

The current dip is a sign that the market may be entering into volatility, with potential for pullbacks.

Gold peaks before BTC breaks out

The chart shows a pattern between gold and Bitcoin: gold pumps, Bitcoin dumps, gold peaks, and then Bitcoin rallies.

Analyst Ted Pillows argued the market sat in phase two, with gold rising and BTC retracing pushes.

Source: X

Past cycles proved that once gold tops out, Bitcoin tends to change things up and surge toward new highs. Until that moment, however, every short-term pump in BTC could continue to get erased.

With gold’s rally still in play and Bitcoin consolidating, the breakout could be explosive when the time’s right.

BTC stalls as momentum fades

At press time, Bitcoin traded at $110,764 after failing to sustain momentum above $111,000.

Source: TradingView

On top of that, the daily chart showed that BTC’s recent recovery attempts were met with resistance, leading to multiple red candles over the past week.

RSI was near neutral, so bears still held the edge while leaving room for a potential bounce if buying pressure returned. Meanwhile, OBV slipped, showing weaker inflows compared to earlier in the month.

Overall, Bitcoin’s short-term outlook leaned neutral-to-bearish, with price action consolidating in a tight range.