The cryptocurrency market is facing a moment of uncertainty with Bitcoin (BTC) having lost a bull trend against gold (XAU) that lasted over 12 years.
On March 14, 2025, the cryptocurrency breached a historical support line in the BTC/XAU ratio, raising doubts about its future trend.
Analysts like NorthStar warn that this signal could indicate the end of the bull market if BTC remains below this level for a week or more.
Gold at all-time highs while Bitcoin loses momentum
The recent drop in the BTC/XAU ratio coincides with the new record of the gold price, which surpassed 3,000 dollars per ounce on March 14. This year the precious metal has recorded a growth of 12.80%, while Bitcoin has lost 11% in the same period.
The differences in the net flows of exchange-traded funds (ETF) highlight this divergence.
Gold-based ETFs in the United States have attracted over 6.48 billion dollars since the beginning of the year, according to the World Gold Council. Globally, inflows into gold-related funds have reached 23.18 billion dollars.
On the contrary, the spot Bitcoin ETFs in the United States experienced outflows of approximately 1.46 billion dollars, according to data from the Glassnode platform.
This capital shift reflects risk aversion sentiments and macroeconomic uncertainty, fueled by the aggressive trade policies of President Donald Trump, who introduced new tariffs on China, Mexico, and Canada.
These moves have increased fears of a global recession, pushing investors towards safe-haven assets like gold.
Central banks such as those of the United States, China, and the United Kingdom have also increased their gold reserves, further contributing to the rise in the price of gold.
On the other hand, Bitcoin seems to follow a behavior more similar to risk assets. On March 14, its 52-week correlation coefficient with the Nasdaq Composite index was 0.76, indicating a strong dependence on the stock markets.
Could Bitcoin face a significant decline?
The current trend of the BTC/XAU ratio recalls historical patterns already observed, particularly the period between March 2021 and March 2022, which preceded the last bear market of criptovalute.
During that phase, the BTC/XAU showed a bear divergence, where prices continued to rise but with a relative strength index (RSI) in decline.
This loss of momentum initially led the BTC/XAU ratio to test the 50-period exponential moving average over two weeks (50-2W EMA) before undergoing a drastic 60% decline.
In the same period, Bitcoin experienced a 68% correction against the US dollar.
Currently, similar signals are reappearing: the recent break of BTC/XAU below the key support could be the beginning of a new bear phase.
If the BTC/XAU ratio were to decisively fall below the support of the 50-2W EMA (around 26 XAU), Bitcoin could face downward pressure even against the dollar.
If the current phase were to follow the same trajectory as 2021-2022, Bitcoin could drop to 65,000 dollars, a decline of about 40% compared to its all-time high of 110,000 dollars recorded in January 2025.
Some analysts, including those from Nansen, see these movements as a correction within a bull market. If the 50-2W EMA holds, Bitcoin could still return to gaining value.
However, a decisive break below this critical level could push the cryptocurrency into a true bear market, with a potential downside target around 34,850 dollars, corresponding to the 200-2W EMA.
Bitcoin at a crossroads
The recent break in the BTC/XAU ratio and the growing interest in gold as a safe-haven asset could indicate significant changes in the financial markets.
Bitcoin is showing signs of weakness compared to gold and even in dollars it could face further declines.
If the 2021-2022 pattern were to repeat, BTC could drop to $65,000 or, in an extreme scenario, reach $34,850. However, holding key support levels could open the door to a bull reversal.
Investors should closely monitor the upcoming developments, considering both the macroeconomic context and the dynamics of Bitcoin’s demand and supply.
