Key insights:
The ongoing decline in gold prices may pave the way for a Bitcoin recovery, as suggested by various analysts.
A surge to between $150,000 and $165,000 by the end of the year remains a possibility according to technical analysis.
Bitcoin (BTC) is indicating signs of bottoming out as gold (XAU), its counterpart, appears to be experiencing an overextended rally.
Bitcoin suggests a “generational bottom” as gold retreats
After reaching an all-time peak of approximately $4,380 per ounce on Friday, gold’s upward momentum seems to have stalled, falling by 2.90% since then. Nonetheless, the precious metal has risen over 62.25% year-to-date.
Gold’s daily relative strength index (RSI) has remained above 70 for the past month, signaling that the asset may be overbought and susceptible to profit-taking.
During gold’s correction, Bitcoin has surged nearly 4%, bouncing back from its four-month low near $103,535. Its RSI reading is at its lowest since April, depicting a bottoming structure that has historically preceded rebounds of 60% or more.
Some analysts interpret this inverse movement as an indication that Bitcoin is nearing its bottom.
This view is supported by analyst Pat, who forecasted a “generational bottom” for Bitcoin, based on its performance in relation to gold over the past four years.
The Bitcoin-to-gold ratio has fallen to levels historically correlated with market bottoms, reminiscent of patterns seen in 2015, 2018, 2020, and 2022, where Bitcoin subsequently rallied between 100% and 600%.
By mid-October, the ratio has again dipped below –2.5, indicating that BTC might be undervalued compared to gold after the metal’s remarkable ascent to $4,380. This could signal the onset of Bitcoin’s next bull run.
Analyst Alex Wacy notes that gold’s recent pullback mirrors its 2020 peak, which coincided with a local Bitcoin bottom. The pressing question is whether gold will once again signify a bullish turnaround for BTC.
HSBC forecasts that gold’s ascent isn’t finished yet
In contrast to the increasing sentiment that gold’s explosive growth may be waning, HSBC has reaffirmed its optimistic outlook, projecting that the precious metal could rise to $5,000 per ounce by 2026.
The bank attributes its bullish forecast to geopolitical tensions, economic unpredictability, and a weakening US dollar, all of which it anticipates will sustain strong demand.
This rally is expected to differ from previous ones, as it will likely be fueled by long-term investors seeking stability rather than short-term speculative trading.
Gold’s rally in 2025 has already faced several overbought corrections; however, each setback has resulted in even higher prices.
This pattern demonstrates ongoing investor confidence amid geopolitical and monetary unpredictability, precisely the conditions HSBC believes will keep the rally thriving into 2026.
The outlook for Bitcoin remains highly positive, with JPMorgan analysts predicting BTC will hit $165,000 by 2025, asserting that it is still undervalued compared to gold.
Related: Bitcoin trader urges ‘lock in’ as dip-buyers enter below $110K
Analyst Charles Edwards also mentioned that a significant breakout above $120,000 could quickly propel BTC toward $150,000.
This article is not intended as investment advice or recommendations. All investments and trading carry risks, so readers should conduct their own research before making decisions.
