As of April 22, Bitcoin’s (BTC) value relative to gold (XAU) appears vulnerable, potentially facing a sharp 35% decline. This projection is underscored by robust historical bear market signals, compounded by significant turbulence that has resulted in a staggering $13 trillion wipeout from the U.S. stock market.
Breaking Below Key Gold Support
For the first time since April 2022, the BTC/XAU ratio has closed below its 50-period exponential moving average (EMA) on the two-week chart. Such a decisive move below this crucial support level has historically led to extended downtrends towards the 200-period EMA.
In both 2021 and 2022, the BTC/XAU experienced initial recoveries after testing the 50-EMA, only to succumb to further declines toward the 200-EMA eventually. This pattern seems to be repeating as we navigate through 2025, with BTC/XAU showing signs of breaking lower once again, suggesting another drop towards the 200-EMA—indicating an approximate 35% downturn.
Mike McGlone, Bloomberg Intelligence’s senior commodity strategist, shares a similarly bearish outlook, noting a significant correlation between the Bitcoin-to-Gold ratio and the U.S. stock market.
McGlone remarks, “What’s $13 trillion? The 2025 peak-to-trough drop in U.S. stock market capitalization—almost 50% of GDP.” His analysis further posits that whilst short-term recovery rallies might occur within bear markets, the prevailing downward trajectory for both Bitcoin and equities could continue.
This sentiment is distinctly at odds with the ongoing narrative of a potential decoupling of Bitcoin from U.S. stock market movements.
Historical Signals Indicating BTC Depreciation
Weakness in the BTC/XAU pairing is not merely a relative indication; it often precedes substantial declines in Bitcoin’s absolute price. The trend observed during the 2021–2022 cycle exemplifies this correlation. Following a break below its 50-EMA in late 2021, Bitcoin’s price plunged from over $42,000 to below $17,000, cementing a prolonged bearish phase.
Should the historical correlation between BTC/XAU and BTC/USD persist, Bitcoin may face a heightened risk of declining toward its 200-week EMA by the end of the year, currently estimated to be around $50,950.
Disclaimer: This analysis does not constitute investment advice. All investment and trading actions entail risk, and individuals should conduct thorough research when making decisions.
