Is the writing on the wall for Bitcoin, as it sinks ever closer to the top of the previous 2021 bull market? Is gold now leading the way down, or is this just a huge corrective move that is about to catapult both assets back to the upside? Gold bounces after falling like a stone Source: TradingView The most incredible corrective impulse for gold over such a short time frame has not been seen in modern history. From a $5,600 high, the gold price has fallen like a stone in only three days, to plunge down to $4,400 - a 21% cascade. While what could be a formidable bounce is now taking place, it has to be wondered how the gold price could have plummeted to such depths in such a short period of time? That said, it can be seen in the price chart above that the $4,400 horizontal support has held, and now the price is also receiving support from an ascending trendline. The gold price could well continue to go up from here, and given the current extreme global geopolitical uncertainty, a return to the highs may not take too long to happen. So what about Bitcoin? Could Bitcoin be about to take over from gold? Source: TradingView Although not directly correlated with gold, the general consensus among analysts is that the $BTC price will generally follow gold, but after a potential time lag of around 3 to 6 months. So far, this period only amounts to around 6 weeks, so we are potentially only half way through gold’s outperformance in relation to Bitcoin. That said, a ratio chart of BTC to gold might suggest that this outperformance could be coming to an end. At least in the short term chart for $BTC , a current rally may signal that things could change, although the price does not have far to go in order to gain the horizontal support line that runs across to the top of the 8-month bull flag that was in force for the greater part of 2024. Potential Wyckoff distribution reaches the ‘spring’ stage Source: @MartyParty X.com Marty Party, chart analyst on X, has the thesis that the $BTC price action over recent weeks is conforming to a Wyckoff distribution pattern. If his thesis is correct, the all-important ‘Spring’ has been triggered, and this should see Bitcoin begin its next rally. Whether or not this happens still remains to be seen. Positives in the daily chart Source: TradingView The daily time frame has some positives if one puts aside the breakdown out of the bear flag. Among these are that the $BTC price looks to be bouncing from the strong $73,600 horizontal support. Also, if one looks at the Stochastic RSI indicators, it can be seen that they are posturing for a move up from the bottom, and the RSI is signalling hidden bullish divergence, with the indicator line in an oversold condition that rarely dips this far. Bear market, or heavy correction? Source: TradingView The double bottom that has been discussed in previous articles may have been surpassed. However, another much bigger double bottom has come into play instead. This corresponds to the price bottom of the falling wedge back in April 2025. If this is not enough, very strong horizontal support, at $73,600, and down to $69,000 , is likely to take a lot of downward pressure from the bears to make it give way. The Stochastic RSI indicators in the weekly time frame have also been mentioned frequently in past articles. It was thought that once these rolled over, which they are now doing, that would signal an entry into the bear market. This could be happening. That said, the indicators have crossed down extremely quickly, and may even be ready to cross back up as soon as next week. Is this a bear market, or is it perhaps a heavy correction that is still finding a bottom? Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
