Bitcoin News Today: Bitcoin Plummets to 3-Year Lows vs. Gold, Setting Up Potential Rebound Signal

Bitcoin's relative strength against gold has plummeted to three-year lows, sparking speculation about a potential bullish rebound. The BTC/XAU ratio has dipped to approximately 20 ounces of gold, the lowest since early 2024, and is now flirting with key support levels. Analysts are closely watching for signs of divergence, as the weekly RSI for Bitcoin versus gold has fallen below 30-historically a signal of oversold conditions preceding major market turns.

At the same time, gold has reached record highs, driven by expectations of Federal Reserve rate cuts and strong central bank demand. This has intensified the contrast between the two asset classes, with Bitcoin consolidating near $86,000 after a sharp selloff. The divergence reflects a shift in investor behavior toward traditional safe havens amid macroeconomic uncertainty and rising real yields.

The recent drop in Bitcoin's performance relative to gold has not gone unnoticed by market observers. Crypto analyst Michaël van de Poppe noted that Bitcoin appears undervalued while gold is potentially overextended. He pointed to historical patterns where the RSI for BTC/XAU fell into oversold territory before major bottoms, suggesting a possible reversal is on the horizon.

Market Divergence and Rotation Signals

Gold's dominance in 2025 has been fueled by its role as a hedge against financial volatility. The precious metal has surged 62% year-to-date, reaching $4,282 per ounce, with central banks and institutional investors increasing their allocations. Meanwhile, Bitcoin has faced selling pressure amid ETF outflows and profit-taking by long-term holders, which contributed to a 30% drop from its October peak.

The BTC/XAU ratio is now at its lowest in three years, a level that historically signals a turning point. Van de Poppe highlighted that the daily RSI for the pair has begun forming a bullish divergence, indicating that Bitcoin could outperform gold in the near term. This divergence is particularly notable given that Bitcoin has previously bounced off similar support levels during prior bear markets.

Risks and Potential for Rebound

Despite the optimism, Bitcoin still faces headwinds. A breakdown below the 20-ounce level could trigger a deeper correction, potentially testing $80,000. Analysts warn that gold's strong momentum could continue if economic conditions remain unstable, particularly if the Federal Reserve delays rate cuts.

However, Bitcoin's long-term fundamentals remain intact. The digital asset has seen significant demand from institutional investors and is on the cusp of regulatory clarity with the proposed Clarity Act. If passed, the bill could provide much-needed legal clarity and boost Bitcoin's adoption.

The coming weeks will be crucial for Bitcoin. A break above $94,000 could signal a broader market rotation back to risk-on assets, while a sustained move above the 50-day moving average would provide further confirmation of a potential bull case. With gold already overextended and Bitcoin trading at a multi-year low relative to the metal, the stage is set for a potential shift in investor sentiment.