Is Bitcoin Going To Crash? This Accurate Gold Indicator Shows So

Bitcoin’s ongoing bull run may be nearing a key inflection point, according to the XAU/BTC ratio—a metric that compares the price of gold (XAU) to Bitcoin (BTC).

A falling ratio indicates Bitcoin outperforming gold, while a rising ratio reflects the opposite. When the ratio bottoms out, it often signals overbought Bitcoin conditions, where speculative interest in Bitcoin peaks and Gold undervaluation, which prompts a rotation into safer assets, especially during risk-off environments.

 

Gold Fractal Shows Bitcoin Topping Out At Around $100,000

The XAU/BTC ratio, now hovering near the 0.027–0.028 BTC range, has marked key reversal points for Bitcoin over the past 3.5 years.

Every time the ratio hits the 0.027-0.028 BTC levels, and its relative strength index (RSI) drops below the oversold threshold of 30, Bitcoin peaks afterward. This trend first emerged in March 2021, when the ratio bottomed near 0.027 BTC as Bitcoin surged to its then-all-time high of $64,500. A sharp correction followed.

A similar scenario unfolded in November 2021, as Bitcoin hit $69,000 while the ratio revisited the 0.027 BTC support. Once again, Bitcoin reversed into a prolonged bear market. In April 2024, the ratio returned to this level, coinciding with a Bitcoin rally to $65,000 before a minor pullback.

The ratio is back at the same level as Bitcoin trades at nearly $96,000. That may lead to another sharp correction in BTC/USD markets.

Bitcoin is Eyeing a Decline Toward $62,000

Bitcoin’s ongoing rally has pushed its price above key Fibonacci retracement levels derived from the $67,000 peak in November 2021 to the $16,000 low in November 2022. The price is currently testing the 1.618 Fibonacci extension level at $99,100, a zone acting as resistance.

Adding to the bearish outlook, the weekly RSI exceeds 74, signaling overbought conditions. This level historically precedes corrections, as seen during Bitcoin’s 2021 bull runs when the RSI breached similar levels before sharp selloffs.

Bitcoin corrections during overbought phases often find support around its 50-week EMA. For example, during the 2021 bull run, Bitcoin rallied to $64,500 in April before correcting toward the 50-week EMA, which was supported.

A similar pattern occurred after the November 2021 peak at $69,000, where Bitcoin eventually returned to its 50-week EMA before falling further into a bear market.

That puts BTC’s downside target at around $62,000.