Bitcoin (BTC) is showing strong signals of a potential cycle bottom against gold, with key technical indicators suggesting a reversal in the 14-month bear market. The BTC/Gold ratio and momentum indicators have reached historic lows, often marking the start of a new bullish phase for Bitcoin.
Technical Indicators Point to a Potential Bottom
Data from TradingView reveals that the relative strength index (RSI) of the BTC/Gold ratio has begun to climb, reaching its most oversold level of 21 in mid-February. This indicates a fading bearish momentum. Similarly, the moving average convergence divergence (MACD) indicator has dropped to its lowest level ever and is poised to produce a bullish cross.
Note that previous bullish crosses, particularly those coming after the RSI has recovered from oversold conditions, have marked macro bottoms for the ratio. These bottoms have historically led to significant Bitcoin price breakouts against gold, ranging from 280% to 620% in 2019, 2021, and 2023.
Historical Patterns and Analyst Insights
The BTC/Gold ratio has now recovered to 33 from 21 in mid-February. When combined with a buy signal on the MACD, the current chart pattern resembles previous cycles. Technical analyst James Easto commented on X, stating, “Bottom is in for $BTC vs Gold,” adding that the “stage is set” for Bitcoin’s recovery.
Analysts at GeoMetric noted that the past three BTC/Gold bear markets have lasted between 12-14 months, with drawdowns ranging from 75% to 84%. The current cycle has lasted about 13 months and has seen an 81% drawdown, surpassing the 2021 bear market. This historical context provides a solid case for a potential bottom.
Price Support and Future Outlook
Bitcoin (BTC/USD) remains cautiously bullish as long as it holds the $68,000-$70,000 support zone. This range is significant as it includes the 200-week exponential moving average (EMA) and 50-day simple moving average. The 200-week EMA is a crucial support band for BTC during bear markets, and analysts warn that its reliability could be tested on Sunday’s weekly close.
Bitcoin analyst AlphaBTC expressed confidence that Bitcoin will recover to $80,000 before potentially dropping toward $50,000, as long as the price stays above the weekly low at $68,800. “I don’t want to see this week’s low lost, otherwise it’s going to break back down to range lows or lower!” he stated.
Holding $70,000 would align with a previous fractal recovery path, opening a move toward $76,000-$80,000. This potential recovery path is supported by historical patterns and could signal a significant bullish trend for Bitcoin in the coming weeks.
Conclusion and Forward-Looking Insight
While Bitcoin faces a critical support level at $70,000, the technical indicators and historical patterns suggest a strong case for a cycle bottom against gold. If Bitcoin can hold and recover from this level, it could mark the beginning of a new bullish phase, potentially leading to significant price gains. Investors and traders should monitor these levels closely and stay informed about the broader market conditions that could influence Bitcoin’s trajectory.
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