Important points:
According to several analysts, the continued decline in gold could trigger a rebound in Bitcoin.
Based on technical analysis, there is still a chance it could rise to $150,000-$165,000 by the end of the year.
Bitcoin (BTC) is showing signs of bottoming out as the rally of its analogue rival gold (XAU) begins to look increasingly overextended.
Bitcoin signals “generational bottom” as gold falls
After hitting an all-time high of around $4,380 an ounce on Friday, gold prices appear to have stalled, with the metal down 2.90% since then. Still, the precious metal has gained more than 62.25% since the beginning of the year.
Its daily relative strength index (RSI) reading has been consistently above 70 over the past month, indicating the asset is overbought and at risk of profit taking.
Bitcoin rose about 4% during gold’s correction, recovering from its worst four-month low near $103,535. The RSI reading is also at its lowest level since April, reflecting the underlying structure that preceded past pullbacks of more than 60%.
For some analysts, this reverse movement suggests that Bitcoin prices have hit rock bottom.
Among them is analyst Pat, who predicted a “generational bottom” for Bitcoin, citing its performance compared to gold over the past four years.
The Bitcoin-to-gold ratio has plummeted to levels historically associated with market bottoms, last seen in 2015, 2018, 2020, and 2022. Each time, Bitcoin rose between 100% and 600%.
As of mid-October, this ratio is once again below -2.5, indicating that Bitcoin may be undervalued relative to gold after Bitcoin hit a record of $4,380. It could mark the beginning of Bitcoin’s next bullish phase.
For analyst Alex Wacy, gold’s decline is similar to its 2020 peak, which coincided with Bitcoin’s bottom. The question now is whether gold will show another bullish reversal for BTC.
HSBC predicts gold will not hit a plateau yet
In contrast to widespread speculation that gold’s record growth may be easing, HSBC has doubled down on its bullish outlook, predicting the precious metal could rise to $5,000 an ounce by 2026.
The bank cited geopolitical tensions, economic uncertainty and a weaker dollar as the basis for its bullish outlook, which it said will keep demand strong.
Unlike previous bull markets, this one is expected to be driven by long-term investors seeking stability in their portfolios, rather than short-term speculation.
Gold’s 2025 rally saw several overbought corrections, but each decline pushed the price higher.
This pattern reflects sustained investor confidence amid geopolitical and financial uncertainty, and this is precisely the situation that will sustain the bull market through 2026, HSBC said.
The outlook for Bitcoin itself remains very optimistic, with JPMorgan analysts claiming that Bitcoin remains undervalued compared to gold and predicting that Bitcoin will reach $165,000 in 2025.
Related: Bitcoin trader says ‘lock-in’ as market buys fall below $110,000
Similarly, analyst Charles Edwards noted that a definitive breakout above $120,000 could push BTC toward $150,000 “very quickly.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should conduct their own research when making decisions.
