Bitcoin Breaks 12-Year Trendline Against Gold Amid 11% Drop

On March 14, Bitcoin (BTC) breached a rising support trendline against gold (XAU), which had been intact for over 12 years. This significant event occurred as the price of gold hit a new record high above $3,000 per ounce, marking a 12.80% increase year-to-date. In contrast, Bitcoin, often referred to as "digital gold," has experienced an 11% drop so far in 2025.

This breakdown in the Bitcoin-to-gold ratio has raised concerns among analysts about the potential end of Bitcoin’s 12-year bull run. If Bitcoin remains below the gold trendline for an extended period, it could signal a shift in market sentiment. The contrasting performances of Bitcoin and gold reflect the differing net flows into US-based spot exchange-traded funds (ETFs) tracking these assets. Gold ETFs have seen significant inflows, while Bitcoin ETFs have experienced outflows.

The divergence in performance can be attributed to growing macroeconomic uncertainty and risk-off sentiment, exacerbated by aggressive trade policies. New tariffs on various countries have heightened fears of a global economic slowdown, driving investors toward traditional safe-haven assets like gold. Central banks, including those in the US, China, and the UK, have also accelerated their gold purchases, further boosting gold prices.

In contrast, Bitcoin's performance mirrors the broader risk-on market. Its 52-week correlation coefficient with the Nasdaq Composite index was 0.76 as of March 14, indicating a strong positive correlation. This alignment with the broader market suggests that Bitcoin's price movements are influenced by overall market sentiment and economic conditions.

The current Bitcoin-to-gold breakdown aligns with historical patterns, particularly the March 2021–March 2022 fractal, which preceded the last bear market. During that period, the BTC/XAU ratio exhibited a bearish divergence, characterized by rising prices juxtaposed against a declining relative strength index (RSI). This pattern suggested diminishing upward momentum, leading to a significant correction in Bitcoin's price.

The current situation echoes the 2021–2022 fractal, with the BTC/XAU ratio completing a two-phase EMA retest. The RSI showing bearish divergence indicates fading momentum, increasing the probability of further declines. If the ratio drops decisively below the 50-2W EMA support (~26 XAU), it could signal increased vulnerability to price declines in dollar terms, with the 50-2W EMA below $65,000 acting as the next potential downside target.

This potential decline is significant, as it represents a 40% drop from Bitcoin’s record high of around $110,000 established in January. Analysts consider such a decline as a "correction within a bull market," raising possibilities of a bullish revival if the 50-2W EMA holds as support. However, a definitive break below the EMA could thrust Bitcoin into bear market territory, with the 200-period two-week EMA (the blue wave) potentially acting as the next support level, as low as $34,850.