Bitcoin’s (BTC) value relative to gold (XAU) may be poised for a steep 35% drop as it mirrors historical bear market signals and reacts to massive turbulence that has wiped out $13 trillion from the US stock market.
Bitcoin’s breaks below key gold support
As of April 22, the BTC/XAU ratio had closed below its 50-period exponential moving average (50-period EMA; the red wave) on the two-week chart for the first time since April 2022.
BTC/XAU two-week performance chart. Source: TradingView
Historically, a decisive close below the 50-period EMA has led to an extended downtrend toward the 200-period EMA (the blue wave).
For instance, in both 2021 and 2022, BTC/XAU experienced an initial bounce after testing the 50-EMA, only to eventually break below it and decline toward the 200-EMA, as shown above.