Gold has recently experienced significant gains, while Bitcoin (BTC) is showing notable signs of weakness, with its prices drifting toward lower support levels. The cryptocurrency is nearing the heavily monitored $82,000 mark, which many consider pivotal for determining Bitcoin’s next major directional movement.
In light of this market backdrop, analyst Doctor Profit has drawn attention to a critical chart he believes is essential for understanding the current Bitcoin cycle: the Gold-to-Bitcoin (GOLD/BTC) ratio. Profit claims that this chart has consistently provided reliable indicators for major market tops and bottoms. He first introduced this analytical framework nearly a year ago, identifying a historical trend where Bitcoin tends to peak when the ratio of 0.02 BTC equals one ounce of gold and reaches its bottom when the ratio hits around 0.11 BTC per ounce.
Profit highlighted that this relationship was evident in the previous cycle, accurately pinpointing Bitcoin’s peak in 2021 and its subsequent bottom in 2022. He argues that the same pattern is emerging in the current cycle, with Bitcoin’s recent peak near $125,000 corresponding to the GOLD/BTC ratio reaching the less-visited 0.02 threshold.
The pressing question now, according to Profit, is whether the market will see the ratio fall to the historical 0.11 BTC-per-ounce level, a strong indicator of a market bottom. Based on current estimates, and assuming gold is priced at approximately $5,500 per ounce, dividing that figure by 0.11 would suggest a Bitcoin price close to $50,000. He indicated that this aligns with his forecast of a BTC cycle low between $50,000 and $60,000. Even in a more optimistic scenario for gold, with prices potentially climbing to $7,000 per ounce, the same ratio would suggest a Bitcoin bottom around $63,000. Profit contends that both scenarios indicate gold is likely to outperform Bitcoin in the near future.
While Profit’s bearish outlook has gained traction, other analysts have taken a different stance on Bitcoin’s prospects. Technical analyst Michael van de Poppe provided a more optimistic viewpoint, suggesting that gold’s recent strength could be nearing its peak. He posits that this could allow for a capital rotation back into Bitcoin. Van de Poppe focused on the relative strength index (RSI) of Bitcoin compared to gold, noting it has reached the lowest levels ever recorded. He interprets this as a sign of a significant valuation imbalance, where one asset appears overextended while the other is gravely undervalued. He characterized this phase as part of the “big rotation” in the market cycle.
Additionally, van de Poppe cited Bitcoin’s Z-Score indicator, a benchmark measuring the cryptocurrency’s market capitalization against its realized capitalization, adjusted for volatility. He indicated that Bitcoin’s current Z-Score is lower than during several significant historical bottoms, including in 2015, 2018, the COVID-19 crash in 2020, and the trough of the 2022 bear market. This suggests to him that Bitcoin is deep into its bear market phase and may be nearing its concluding stages.
At the time of reporting, Bitcoin was trading at $83,435, reflecting declines of 2.2% over the past 24 hours and 7% over the last week. The divergent views highlight a growing debate among analysts regarding the future trajectory of Bitcoin, particularly amid gold’s recent performance.
