Gold has become the preferred safe haven for the global market amid growing concerns about an economic recession deepening due to the Trump tariff war. On the evening of yesterday (14th), it has surpassed $3,000 per ounce, setting a new historical high, with a market capitalization exceeding $22 trillion. This week, Bitcoin, which has been experiencing volatility along with US stocks, is currently trading at $83,852, with a market capitalization of around $1.65 trillion. Currently, Gold is more than 13 times the market value of Bitcoin.
As Trump's tariff policy plunges the global economy into great uncertainty, the hedging narrative of "Digital Gold" Bitcoin has recently become clearly ineffective. Cointelegraph reports that the Bitcoin to Gold ratio has fallen below the upward support trend line that has persisted for 12 years.
The renowned analyst NorthStar tweeted on the 13th that if Bitcoin remains below this level a week later, the situation will be very bad, and if it is still below this support line a month later, it means that this bull market should end, and the market could get even worse.
Gold ETF sees net inflows of $10 billion in a single month, while Bitcoin ETF sees net outflows of $5 billion
Gold spot prices have risen about 12.8% since the beginning of the year, while Bitcoin has fallen 11% so far this year. The 90-day correlation between Bitcoin and Gold is around -0.5, but its 52-week correlation coefficient with the Nasdaq index reaches 0.76, indicating that its trend is closer to that of risk markets such as stocks.
Additionally, the capital inflows of Gold and Bitcoin ETFs have diverged. As of March 14th, US Gold spot ETFs have attracted over $6.48 billion in inflows so far this year, while global Gold ETFs have seen inflows of $23.18 billion. In contrast, US Bitcoin spot ETFs have seen net outflows of about $1.46 billion this year.
ByTree founder and BOLD ETF (managing both Bitcoin and Gold) manager Charlie Morris told Coindesk that over the past 30 days, Gold ETFs have attracted $10 billion in net inflows, while Bitcoin ETFs have seen $5 billion in net outflows, but he expects this trend to reverse soon, "The capital flow will eventually reverse again, just like in the past."
Gold is expected to surge to $3,500 per ounce in Q3, while Bitcoin may retest $65,000?
Analysts at Macquarie Group estimate that the safe-haven appeal of Gold will continue to strengthen, and Gold spot prices are expected to soar to $3,500 per ounce in the third quarter of this year. Goldman Sachs Group raised its year-end Gold price target to $3,100 per ounce last month.
Cointelegraph analyzes that the current trend of Bitcoin and Gold is consistent with historical patterns, particularly the bearish divergence between BTC/XAU from March 2021 to March 2022, where prices rose while the Relative Strength Index (RSI) declined, indicating a weakening uptrend. This pattern initially saw BTC/XAU pull back to the 50-2W Exponential Moving Average (EMA) support, ultimately plummeting 60%, coinciding with a 68% crash in Bitcoin.
Currently, BTC/XAU has completed two stages of EMA retesting, and with RSI showing bearish divergence, momentum appears to be weakening, increasing the possibility of further downside, especially if the ratio decisively breaks below the 50-2W EMA support (~26 XAU), where $65,000 could become the next potential downside target for Bitcoin, implying a potential 40% crash from the $111,000 all-time high.
However, Nansen analysts believe that this decline is a "correction within a bull market," and if the 50-2W EMA holds support, the likelihood of a bull market recovery will increase. However, if it breaks below the EMA, Bitcoin may enter a bear market territory.
If the BTC/XAU bearish divergence pattern repeats, it could drag Bitcoin's downside target for 2025 towards the 200-2W EMA support at $34,850.
