While gold has posted major gains, Bitcoin (BTC) continues to show major signs of weakness, with prices drifting toward lower support levels and now approaching the closely watched $82,000 mark, a pivotal point in determining the next major direction for the worldโs largest cryptocurrency.
Against this backdrop, market analyst Doctor Profit has drawn attention to what he describes as one of the most important charts of the current Bitcoin cycle: the GoldโtoโBitcoin (GOLD/BTC) ratio.ย
What The Gold-To-Bitcoin Ratio Suggests
According to Profit, this chart has repeatedly provided reliable signals for major market tops and bottoms. He noted that he first shared this framework nearly a year ago, highlighting a historical pattern in which Bitcoin tends to peak when 0.02 BTC equals one ounce of gold, and bottom when that ratio reaches 0.11 BTC per ounce.
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Profit pointed out that this relationship played out during the previous cycle, accurately marking Bitcoinโs top in 2021 and its bottom in 2022. He argues that the same pattern has repeated in the current cycle, claiming Bitcoinโs recent top near $125,000 when the goldโtoโBitcoin ratio once again reached the 0.02 level.
The key question now, he says, is whether the market will again reach the 0.11 BTCโperโounce level that has historically signaled a bottom. Based on current prices, Profit walked through the math.ย
Assuming a gold price of roughly $5,500 per ounce, dividing that figure by 0.11 implies a Bitcoin price near $50,000. That outcome, he noted, aligns with his broader expectation that Bitcoinโs cycle low could fall somewhere between $50,000 and $60,000.
He added that even under a more bullish scenario for gold, the analysis still supports his thesis. If gold were to rise to $7,000 per ounce, the same ratio would imply a Bitcoin bottom near $63,000. In his view, both scenarios reinforce the idea that gold is likely to outperform Bitcoin in the coming months.
BTC Nearing LateโCycle Bear Phase?
Not all analysts, however, share that bearish outlook for Bitcoin. Offering a contrasting perspective, technical analyst Michael van de Poppe suggested that goldโs recent strength could be nearing exhaustion, potentially setting the stage for capital to rotate back into Bitcoin.ย
Van de Poppe highlighted the relative strength index (RSI) of Bitcoin measured against gold on the weekly timeframe, noting that it has reached the lowest level ever recorded.ย
In his assessment, this suggests a sharp imbalance in valuations, with one asset appearing overextended in the short term and the other deeply undervalued. He described the situation as part of what he calls the โbig rotationโ phase of the market cycle.
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The analyst also pointed to Bitcoinโs ZโScore indicator, a metric used to assess whether the cryptocurrency is overvalued or undervalued by comparing its market capitalization to its realized capitalization, adjusted for volatility.ย
According to van de Poppe, the current ZโScore for Bitcoin is lower than it was at several major historical bottoms, including those seen in 2015, 2018, the COVIDโ19 crash in 2020, and the 2022 bear market low. In his view, this signals that BTC is already deep into a bearโmarket phase and may be approaching its final stages.ย
At the time of writing, BTC was trading at $83,435, with losses of 2.2% and 7% recorded in the 24-hour and seven-day time frames, respectively.ย
Featured image from DALL-E, chart from TradingView.comย
