Bitcoin’s (BTC) remarkable rally in 2024, surging over 132% year-to-date, could face a significant correction, with market indicators pointing to potential bearish trends ahead. The cryptocurrency’s performance against gold, a historical measure of speculative overextension, is hitting resistance levels that previously preceded bear markets in 2018-2019 and 2021-2022.
Bitcoin-Gold Ratio Signals Trouble
Analysts, including veteran trader Peter Brandt, highlight the Bitcoin-to-Gold ratio (BTCUSD/GC1!) climbing into the critical resistance range of 34–37. Historically, this zone has marked local market tops and been followed by sharp Bitcoin price corrections.
Adding to concerns, the ratio’s weekly relative strength index (RSI) has breached the overbought threshold of 70, signaling potential overextension. Such a pattern was evident in March 2024, when Bitcoin (BTC) peaked at $74,000, followed by a 33% drop.
Similarly, Bitcoin’s all-time high of $69,000 in November 2021 coincided with the ratio touching this resistance, leading to a 75% correction during the subsequent bear market.
How Low Could Bitcoin Go?
If historical patterns hold, Bitcoin (BTC) may test its 50-week exponential moving average (EMA) as a downside target. Currently, this aligns with the $65,000–$69,000 range, implying a potential 30-35% correction from its current levels by early 2025.
Bitcoin is already showing signs of resistance near the $102,000 level, which coincides with the 1.618 Fibonacci retracement level. A break below this threshold could accelerate the downward trajectory toward the 50-week EMA.
Potential Upside Scenarios
Despite bearish signals, a breakout above $102,000 could defy historical patterns, setting Bitcoin (BTC) on course for a rally toward $150,000. Such a move would invalidate the current bearish fractal, lifting the Bitcoin-to-Gold ratio above its 34-37 resistance zone and extending bullish momentum.
Bitcoin’s (BTC) current market dynamics underscore a critical juncture for the cryptocurrency. As its relationship with gold signals overvaluation, traders are advised to exercise caution. Whether Bitcoin continues its ascent or retraces to historical support levels will largely depend on its ability to break through key resistance points and sustain bullish momentum, according to Cointelegraph.
