Can Bitcoin (BTC) Achieve a New All-Time High Against Gold?

It certainly looks as though the baton has passed from gold to Bitcoin. Gold went on an amazing run, making a new all-time high at $4,380, but since making that top, the price fell back to $4,000. In contrast, Bitcoin had been reversing since its own $124,000 all-time high, but is now heading back up. Can Bitcoin’s momentum take it past the previous all-time high against gold?

Gold falls below trendline

Source: TradingView

The short-term time frame chart for gold reveals a topping M pattern, the measured move for which has already been reached when the gold price tapped the $4,000 horizontal support. Now, for the first time, the price is threatening to confirm below the trendline. It will be known at the end of the day whether there is a confirmation, or if the bulls are able to break back above.

Could gold pull back to $3,600?

Source: TradingView

The weekly chart for gold reveals that if the price does confirm below the trendline and then fall through the support, it could fall all the way down to the ascending trendline drawn from the 2011 bull market top. This would take the price down to around $3,600.

It’s not to say that this drop will take place, but if the price does fall and confirm below the horizontal support, what would be an 18% fall from the top would be similar to the reversals in 2020 and 2022.

BTC/XAU bounces strongly from support

Source: TradingView

The Bitcoin/Gold chart in the weekly time frame puts everything into perspective. While Bitcoin has outperformed gold to a ridiculous extent over the last ten years, it has to be accepted that since the beginning of Q2 of 2021 the ratio is still under those 37 ounce highs. That’s more than four years that gold has held its own against Bitcoin.

However, since Bitcoin bottomed against gold at the end of 2022 the trend has generally been up, except for the last couple of months when gold went on its rapid rise to its high.

Once gold put in its top, the BTC/XAU chart flipped back in favour of $BTC. The strong bounce can be seen in the chart above. In order for $BTC to surpass the high against gold the ratio must first make a higher high at around 37 ounces, which corresponds to the two peaks back in 2021. If the 41 ounces all-time high is then surpassed, a macro higher high would be made and Bitcoin would be very much back in the ascendency. The Stochastic RSI indicators for the weekly and 2-week time frames are at their bottoms ready to provide the necessary upside price momentum.

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.