Key takeaways:
The current pullback in gold may lead to a rebound in Bitcoin, according to various analysts.
A surge to $150,000–$165,000 by the end of the year remains feasible, based on technical analysis.
Bitcoin (BTC) appears to be stabilizing as its comparable counterpart, gold (XAU), shows signs of an over-extended rally.
Bitcoin signals a potential “generational bottom” as gold declines
After peaking at approximately $4,380 per ounce on Friday, gold’s rally seems to have stalled, with a subsequent drop of 2.90%. Nevertheless, the precious metal has gained over 62.25% year-to-date.
The daily relative strength index (RSI) for gold has consistently remained above 70 in recent weeks, indicating that it is overbought and may face profit-taking.
During gold’s correction, Bitcoin has surged nearly 4%, bouncing back from its lowest level in four months near $103,535. Its RSI is at its lowest since April, suggesting a bottom structure that has historically preceded rebounds of 60% or more.
Some analysts believe this inverse relationship indicates that Bitcoin’s price is nearing a bottom.
Among them is analyst Pat, who forecasted a “generational bottom” for Bitcoin, based on its performance alongside gold over the last four years.
The Bitcoin-to-gold ratio has fallen to levels historically linked to market bottoms, as last observed in 2015, 2018, 2020, and 2022. Each instance resulted in Bitcoin rallies ranging from 100% to 600%.
As of mid-October, the ratio has fallen below –2.5, indicating that BTC may be undervalued against gold following the metal’s record rise to $4,380. This could signal the onset of Bitcoin’s next bullish phase.
Analyst Alex Wacy noted that gold’s pullback mirrors its 2020 peak, which coincided with a local Bitcoin bottom. The current question is whether gold will again trigger a bullish turnaround for BTC.
HSBC maintains bullish outlook for gold
In contrast to the prevailing sentiment suggesting a cooling of gold’s record rally, HSBC stands firm with its optimistic prediction, estimating that the metal could reach $5,000 per ounce by 2026.
This bullish outlook is driven by geopolitical tensions, economic uncertainty, and a weaker US dollar, which the bank believes will sustain strong demand.
This rally is anticipated to be fueled by long-term investors seeking stability in their portfolios, rather than short-term speculation.
Gold’s 2025 rally has experienced several corrections but has historically resulted in even higher prices after each dip.
This pattern illustrates sustained investor confidence amid geopolitical and monetary uncertainties—conditions HSBC asserts will keep the rally on track through 2026.
Bitcoin’s outlook is also highly favorable, with JPMorgan analysts projecting BTC could reach $165,000 by 2025, suggesting it remains undervalued relative to gold.
Related: Bitcoin trader advises to ‘lock in’ as dip-buyers emerge below $110K
Additionally, analyst Charles Edwards observed that a significant breakout above $120,000 could rapidly drive 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.
