In recent weeks, Bitcoin (BTC) has shown considerable strength compared to gold (XAU), potentially intensifying the bullish trend. The positive outlook is corroborated by favorable movements in the bitcoin-to-gold ratio, which compares the price of BTC to gold’s price per ounce, alongside the easing trade tensions between the United States and China.
Key Insights:
- Bitcoin has outperformed gold substantially in the past two weeks, with a bullish trend likely to continue.
- The bitcoin-to-gold ratio has emerged from an inverse head-and-shoulders pattern, indicating a forecast of further bitcoin strength.
- An easing of trade tensions between the U.S. and China may foster a broader risk-on sentiment that benefits both cryptocurrencies and stocks.
The ratio breaking through a critical trendline suggests a possible bullish shift. Technical analysis indicates this ratio might reach 35.00, indicating Bitcoin could further outperform gold.
When gold prices peaked at over $3,500 on April 22, it has since seen a decline of more than 8% to around $3,211, while Bitcoin’s price surged nearly 19% to approximately $104,000.
The two nations have agreed to reduce tariffs on each other’s goods, with China proposing a reduction from 125% to 10% and the U.S. reducing tariffs from 145% to 30%.
Mena Theodorou, co-founder of Coinstash, noted this tariff reduction may lead to a resurgence in risk-on investment strategies, with both crypto and equities likely to benefit from renewed investor trust and capital inflow. “The current macro climate shows a pivotal shift,” Theodorou remarked, emphasizing the importance of these trade agreements in driving global market sentiment.
