Bitcoin and Gold: A Shift in the Market

On March 14, Bitcoin (BTC) broke its long-standing support trendline against gold (XAU), which had remained steady for over 12 years. This event has raised concerns among analysts about the potential end of Bitcoin's long-term bull market.

XAU/BTC ratio weekly performance chart. Source: TradingView/NorthStar

Analyst NorthStar warns that if Bitcoin stays below this important trendline for even a week or a month, it could signal a significant shift in the market.

But is the bull market for Bitcoin really over? Let's delve deeper into the correlation between Bitcoin and gold.

Gold Reaches All-Time High While Bitcoin Struggles

On the same day that Bitcoin faced this breakdown, the price of gold soared to a new record, surpassing $3,000 per ounce. This increase marks a rise of approximately 12.80% year-to-date.

In stark contrast, Bitcoin, often referred to as "digital gold," has seen an 11% decline since the beginning of 2025.

BTC/USD vs. XAU/USD YTD performance chart. Source: TradingView

These trends reflect differing investment flows into U.S.-based spot exchange-traded funds (ETFs) that track Bitcoin and gold. As of March 14, U.S. gold ETFs attracted more than $6.48 billion in inflows, according to the World Gold Council. Globally, this figure reached $23.18 billion.

Gold ETFs weekly holdings by region. Source: GoldHub.com

Conversely, U.S. Bitcoin ETFs experienced outflows of nearly $1.46 billion to date this year, according to data from Glassnode.

US Bitcoin ETFs year-to-date net flows. Source: Glassnode

This divergence can be attributed to growing macroeconomic uncertainty and a tendency for investors to seek safer assets, especially amid rising tensions from trade policies implemented during previous administrations.

Related: Research Shows Bitcoin Panic Selling Costs New Investors $100M in 6 Weeks

New tariffs imposed on trade with China, Mexico, and Canada have increased worries about a potential global economic slowdown, prompting investors to gravitate towards traditional safe havens like gold.

In addition, central banks, including those in the U.S., China, and the UK, have ramped up their purchases of gold, further driving up its prices.

Countries Acquiring Gold in 2025. Source: GoldHub.com

In contrast, Bitcoin's performance has reflected a broader risk-on sentiment in the market. As of March 14, Bitcoin's correlation coefficient with the Nasdaq Composite index stood at 0.76.

BTC/USD vs. Nasdaq Composite 52-week correlation chart. Source: TradingView

Is Bitcoin Peaking? Disturbing Signs Emerge

The recent breakdown in the Bitcoin-to-gold ratio mirrors historical patterns, particularly those witnessed from March 2021 to March 2022, prior to the last bear market.

During that earlier period, the BTC/XAU ratio showed bearish divergence, where prices were increasing while the relative strength index (RSI) was declining, indicating weaker upward momentum.

BTC/XAU ratio two-week performance chart. Source: TradingView

As a result, the ratio fell towards a crucial support level—the 50-period two-week exponential moving average (EMA)—before eventually plummeting by 60%.

This breakdown coincided with Bitcoin's significant correction of 68% against the U.S. dollar.

BTC/USD two-week performance chart. Source: TradingView

Now, the BTC/XAU has completed another two-phase EMA retest, echoing the past fractal.

BTC/USD two-week performance chart (zoomed). Source: TradingView

With the RSI revealing a similar bearish divergence, the momentum appears to be dwindling, which raises the possibility of further price declines, especially if the ratio falls decisively below the 50-2W EMA support level (around 26 XAU).

This could also signify Bitcoin's heightened susceptibility to declines in dollar terms, with the next significant downside target below $65,000 being approximately 40% lower than Bitcoin's all-time high of around $110,000 reached in January.

BTC/USD 2W price performance chart. Source: TradingView

However, some analysts suggest that such a price drop may simply represent a "correction within a larger bull market," presenting the potential for a revival if the 50-2W EMA continues to act as support. A decisive break beneath this EMA could push Bitcoin towards bear market territory, possibly dragging prices down to the 200-period two-week EMA, which could see levels as low as $34,850 if the historical fractal repeats.

This article does not provide investment advice or recommendations. Readers should conduct their own research and evaluate risks before making financial decisions.

Bitcoin, Gold, Market