Bitcoin Risks Entering Prolonged Bear Market — Is Gold to Blame?

Bitcoin (BTC) is facing the risks of entering a prolonged bear market in 2025. It has already declined by over 25% a month since establishing a record high of around $110,000.

From a fractal analysis standpoint, Gold—which recently rallied to a record high of over $3,000 per ounce—appears to be one of the key culprits behind Bitcoin’s downside outlook. Let’s examine further.

Bitcoin-to-Gold Ratio Flashes Bearish Signal

The Bitcoin-to-Gold (BTC/XAU) ratio is hovering near a critical technical support level, testing its 50-period exponential moving average (EMA) on the biweekly chart (2W).

Historically, this EMA has acted as a trend-defining support level—but if it fails, it could signal a deeper correction for Bitcoin relative to gold.

A similar setup played out between March 2021 and March 2022, where BTC/XAU initially found support on this EMA before eventually breaking below it and falling by over 60%.

Interestingly, that breakdown preceded Bitcoin’s extended bear market against the U.S. dollar, declining by around 68%.

As of March 14, BTC/XAU had completed a similar two-phase EMA retest, first bouncing from the support level and then returning to test it again after forming a lower high.

The Relative Strength Index (RSI) also shows bearish divergence, a sign of weakening momentum. A confirmed breakdown could accelerate Bitcoin’s downside risk if BTC/XAU follows the same trajectory as in 2021–2022.

Why is Gold Outperforming Bitcoin?

Adding to the bearish outlook, gold has surged past $3,000 per ounce, reaching new all-time highs as investors flock to safe-haven assets. The price rally comes amid heightened global economic uncertainty, largely fueled by President Donald Trump’s trade war policies.

The Trump administration’s decision to impose new tariffs on China, Mexico, and Canada has rattled financial markets, leading investors to seek risk-off assets like gold to hedge against economic instability.

Meanwhile, central banks—including those in China, Russia, and India—have ramped up their gold accumulation efforts to reduce dependence on the U.S. dollar, further strengthening demand.

In contrast, Bitcoin and other cryptocurrencies have faced increased volatility due to their increasing correlation with US stocks, which have performed poorly amid the ongoing trade war.

How Low Can The Bitcoin Price Go in 2025?

Bitcoin’s multi-month uptrend is at risk as it tests its 50-week EMA (~$76,997)—a crucial long-term support level that has historically defined bull and bear cycles. This support level further aligns with Bitcoin’s multi-year ascending trendline price floor.

A decisive breakdown below the 50-week EMA could accelerate selling pressure, mirroring historical BTC corrections that tested the 200-week EMA (~$49,000) before finding a market bottom.

Conversely, a rebound from the 50-week EMA could have Bitcoin rally toward the $100,000 psychological upside target.