Warning: Bitcoin-Gold Ratio Suggests 35% Drop in BTC Price

Andras Crow-Hreidar
By Andras Crow-Hreidar Add a Comment
3 Min Read

Bitcoin’s performance against gold is signaling a potential downturn, according to historical resistance levels observed during previous bear markets. A recurring fractal pattern indicates a sharp price correction may be imminent for the leading cryptocurrency.

Warning: Bitcoin-Gold Ratio Suggests 35% Drop in BTC Price = The Bit Journal

Bitcoin-Gold Ratio Points to Possible 35% Correction

Bitcoin, which has risen 132% in 2024, recently saw a 47% boost following Donald Trump’s election win in November. However, veteran analyst Peter Brandt highlights that Bitcoin’s price may face a steep drop based on its performance relative to gold futures.

The Bitcoin-Gold ratio has reached a critical resistance zone between 34 and 37, historically associated with market peaks. This level coincides with the weekly RSI crossing above 70 into the overbought region, signaling potential overvaluation.

Warning: Bitcoin-Gold Ratio Suggests 35% Drop in BTC Price = The Bit Journal

Historically, the Bitcoin-Gold ratio’s resistance levels have aligned with significant corrections in BTC/USD. For instance:

  • In March 2024, Bitcoin peaked at $74,000 when the ratio hit the 34-37 zone, followed by a 33% price drop.
  • During the 2021-2022 bear market, BTC/USD fell by up to 75%, starting after Bitcoin reached its all-time high of $69,000 in November 2021, which coincided with the ratio hitting the resistance zone.
  • Similar patterns were observed during market peaks in December 2017 and June 2019, when Bitcoin’s RSI entered the overbought territory, leading to corrections of 85% and 72%, respectively.

Key Insights from the Fractal

This fractal reflects a common investor perception: Bitcoin is viewed as a speculative asset during bull markets, while gold serves as a safe haven in bear markets. When Bitcoin becomes overvalued relative to gold, investors tend to reduce their BTC positions, triggering significant price declines.

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Warning: Bitcoin-Gold Ratio Suggests 35% Drop in BTC Price = The Bit Journal

 

How Low Could Bitcoin Go?

Historically, Bitcoin’s corrections from local peaks have often tested the 50-week EMA. In the current scenario, this suggests a potential drop to the $65,000-$69,000 range, representing a 30-35% decline from current levels. This scenario could unfold by early 2025.

However, a breakout above $102,000—a key Fibonacci retracement level—could negate the bearish outlook and propel Bitcoin toward $150,000, aligning with bullish predictions.

Warning: Bitcoin-Gold Ratio Suggests 35% Drop in BTC Price = The Bit Journal

 

Conclusion

While Bitcoin has shown strong performance in 2024, its rising valuation against gold raises caution. Investors should closely monitor the Bitcoin-Gold ratio and other technical indicators to assess potential risks. For the latest updates and expert insights, follow The Bit Journal.

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Disclaimer

The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.

You should conduct your own research and consult with a qualified financial advisor before making any investment decisions. The Bit Journal does not guarantee the accuracy, completeness, or reliability of any information provided in the price predictions, and we will not be held liable for any losses incurred as a result of relying on this information.

Investing in cryptocurrencies carries risks, including the risk of significant losses. Always invest responsibly and within your means.

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Editorial Director Hi there, my name is András and I'm a business and finance journalist living in Norway. My passion lies in uncovering the latest stories in the world of finance and delivering them to my readers in a way that's clear and engaging. I cover a wide range of topics in the finance world, including cryptocurrencies, which I believe have the potential to transform the way we interact with money and financial systems.As a journalist, I'm committed to providing my readers with accurate and reliable reporting. I believe that access to high-quality information is essential for making informed decisions, whether it's about personal finances or investments. When I'm not writing about finance, I enjoy a variety of hobbies and interests.
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