Bitcoin vs. Gold: A Rare Market Squeeze and the Implications for Risk-On and Safe-Haven Assets

The interplay between Bitcoin and Gold in late 2025 has created a rare market squeeze, marked by divergent technical and macroeconomic signals. While Bitcoin's price has plummeted nearly 30% from its peak, Gold has surged to $4,000 an ounce, reflecting a stark shift in investor sentiment. This divergence raises critical questions about the role of digital assets versus traditional safe-haven assets in a world of tightening liquidity and macroeconomic uncertainty. A contrarian analysis of technical indicators and macroeconomic trends suggests that Bitcoin, despite its current underperformance, may yet outperform Gold in the next phase of the cycle.

The Bollinger Band Squeeze: A Historical Rarity

Bitcoin's weekly Bollinger Bands in 2025 reached their tightest levels ever recorded, signaling an impending period of volatility. As the bands began to expand, Bitcoin dropped over 25% in two weeks, testing critical support levels below $100,000. This squeeze, historically a precursor to sharp price moves, was amplified by the U.S. government shutdown and rising inflation, which drove Gold to its best annual performance since 1979. However, Bitcoin's failure to close above the upper Bollinger Band-a technical signal often associated with trend continuation-suggests a bearish bias in the short term.

Gold, meanwhile, has maintained its dominance as a store of value. Its performance has been bolstered by its inverse correlation with risk-on assets, a dynamic that has become more pronounced in 2025 due to trade turmoil and liquidity constraints. JPMorgan analysts argue that Bitcoin is undervalued relative to Gold, estimating its fair value at $170,000-a 70% premium to its November 2025 price. This valuation gap hints at a potential re-rating of Bitcoin as macroeconomic conditions stabilize.

Contrarian Technical Signals: Bearish but Not Extreme

CoinGlass's bearish indicators for Bitcoin in late 2025 include a confirmed death cross (50-day SMA crossing below 200-day SMA), a weekly close below the 50-week moving average, and a sell signal from the SuperTrend indicator. These signals, historically linked to deep corrections, have been exacerbated by on-chain data showing $800 million in realized losses from short-term holders. The Crypto Fear & Greed Index has also plummeted to an extreme fear level of 11, the lowest since February 2025.

Yet, these bearish signals are not extreme in historical context. Bitcoin's 32% drawdown since its October 2025 peak aligns with typical bull-market corrections, and Grayscale notes that such pullbacks rarely signal the end of long-term uptrends. Moreover, elevated put-option skew and increased activity from older Bitcoin on-chain suggest a potential bottoming process. For contrarian investors, these conditions present an opportunity to capitalize on overcorrected valuations.

Macro Chain Index: A Bullish Divergence Amid Bearish Noise

The Macro Chain Index's signals for Bitcoin in late 2025 are mixed but not uniformly bearish. While the death cross and bearish MACD histogram confirm a short-term downtrend, the index's volatility spread relative to the S&P 500's VIX has widened, indicating Bitcoin's potential to outperform equities in a high-volatility environment. This divergence suggests that Bitcoin's role as a macroeconomic hedge is evolving, particularly as institutional adoption and ETP inflows reshape its valuation dynamics.

Contrarian analysts like André Dragosch from Bitwise argue that Bitcoin is already pricing in a deeply pessimistic global growth outlook-akin to the 2022 Fed tightening and 2020 pandemic crash-making it a high-conviction play for a 2026 rebound. The Altcoin Season Index's recent uptick in altcoin performance further hints at a broader market rotation that could benefit Bitcoin as a leading asset.

Strategic Rebalancing: Why Bitcoin Could Outperform Gold

Despite Gold's short-term dominance, Bitcoin's structural advantages position it as a superior store of value in the next phase of the cycle. First, Bitcoin's finite supply and programmable nature make it more resistant to inflation than Gold, which faces logistical challenges in storage and distribution. Second, the integration of Bitcoin into institutional portfolios-evidenced by BlackRock's continued involvement in Bitcoin ETFs-suggests a long-term re-rating.

Third, Bitcoin's technical indicators are nearing oversold territory. A sustained rebound above $80,000 could trigger a deeper accumulation phase, setting the stage for a 2026 breakout. In contrast, Gold's performance is increasingly tied to traditional macroeconomic cycles, which may plateau as central banks normalize monetary policy.

Conclusion: A Contrarian Case for Bitcoin

The 2025 Bollinger Band squeeze has exposed Bitcoin's volatility but also highlighted its potential for asymmetric returns. While Gold has thrived in a risk-off environment, Bitcoin's undervaluation, improving technical conditions, and structural tailwinds suggest it could reclaim its role as a leading store of value. For investors seeking to rebalance their portfolios, the current bearish narrative may present a rare opportunity to position for a 2026 rebound-provided macroeconomic clarity and liquidity conditions improve.