Main Insights:
The current decline in gold may spark a recovery in Bitcoin, as indicated by several analysts.
A rise to $150,000–$165,000 by the end of the year remains achievable, according to technical evaluations.
Bitcoin (BTC) is displaying signs of reaching a bottom as its counterpart, gold (XAU), shows signs of an overextended rally.
Bitcoin Suggests a “Generational Bottom” as Gold Declines
Gold’s ascent seems to have plateaued after reaching an all-time high of roughly $4,380 per ounce on Friday, with a subsequent drop of 2.90%. Nonetheless, the precious metal is still up over 62.25% year-to-date.
The daily relative strength index (RSI) for gold has remained above 70 for the last month, signaling that the asset is overbought and may face profit-taking.
During the correction period of gold, Bitcoin has surged nearly 4%, bouncing back from a four-month low near $103,535. Its RSI is at its lowest since April, resembling a bottoming pattern that previously led to rebounds of 60% or more.
Some analysts interpret this inverse movement as a sign that Bitcoin is nearing a bottom.
This includes analyst Pat, who forecasts a “generational bottom” for Bitcoin, based on its historical performance against gold over the previous four years.
The Bitcoin-to-gold ratio has decreased to levels historically linked with market bottoms, previously observed in 2015, 2018, 2020, and 2022. Following each of these instances, Bitcoin experienced rallies ranging from 100% to 600%.
As of mid-October, the ratio has again dipped below –2.5, suggesting that BTC may be undervalued compared to gold following the metal’s record surge to $4,380. This might signal the onset of Bitcoin’s next bull phase.
Analyst Alex Wacy notes that gold’s retreat parallels its 2020 peak, which coincided with a local Bitcoin bottom. The current question is whether gold will mark another bullish reversal for BTC.
HSBC Believes Gold Has More Room to Grow
In contrast to the increasing opinion that gold’s record rally is losing steam, HSBC stands firm on its bullish stance, predicting the precious metal could rise to $5,000 per ounce by 2026.
The bank’s optimistic outlook is grounded in geopolitical tensions, economic instability, and a declining US dollar, which it believes will maintain strong demand.
Unlike earlier rallies, this one is expected to be driven by long-term investors seeking portfolio stability, rather than short-term speculators.
Gold’s 2025 rally has experienced various overbought corrections, but each downturn has led to even higher prices.
This trend showcases enduring investor confidence amid geopolitical and monetary unpredictability, conditions HSBC asserts will sustain the rally into 2026.
The outlook for Bitcoin also shows great promise, with JPMorgan analysts projecting that BTC will reach $165,000 by 2025, suggesting it remains undervalued compared to gold.
Related: Bitcoin trader advises ‘lock in’ as dip-buyers swoop in below $110K
Likewise, analyst Charles Edwards highlighted that a strong breakout above $120,000 could quickly propel BTC towards $150,000.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
