Bitcoin News Today: Gold Surges 62% as Bitcoin Selloff Deepens in 2025 Divergence

Bitcoin's dominance in the digital asset space has waned in 2025 as investors increasingly turned to traditional safe-haven assets. Gold, in particular, has surged, with prices climbing 62% to $4,282 per ounce amid economic uncertainty and expectations of Federal Reserve rate cuts. In contrast, Bitcoin has faced a selloff, trading at $86,000 after a 30% drop from its October peak.

The divergence between the two assets has sparked a broader debate over investor sentiment and market rotation. Analysts note that Bitcoin's underperformance is not entirely unexpected, given its recent volatility and liquidity challenges. However, the contrast with gold-driven by central bank demand and ETF inflows-highlights a shift in risk preferences.

On-chain data and technical indicators suggest Bitcoin may not have bottomed yet. The Relative Strength Index (RSI) for Bitcoin against gold has dropped below 30, a level historically associated with market bottoms during bear cycles. Analysts like Michaël van de Poppe and Ray Youssef have pointed to this as a sign that a capital rotation could be on the horizon.

Why the Standoff Happened

Gold's rally has been fueled by a combination of macroeconomic factors and institutional activity. Central banks, including those in China and India, have increased their gold purchases, contributing to the 62% year-to-date gain. Meanwhile, U.S. spot gold ETFs have seen strong inflows, reinforcing gold's appeal as a hedge against inflation and geopolitical risks.

Bitcoin, on the other hand, has struggled with liquidity pressures and a lack of institutional confidence. A $200 million in liquidations were triggered during a sharp selloff, with the price dropping well below key moving averages. The market is now watching to see if Bitcoin can stabilize above $80,000, as further downside could lead to more forced selling.

The Federal Reserve's anticipated rate cuts have also contributed to the safe-haven narrative. Investors are shifting capital into assets that offer stability, with gold benefiting from its historical role as a store of value. Bitcoin, despite its technological underpinnings, has not yet been widely accepted as a macro hedge, according to some experts.

What Analysts Are Watching

Market participants are closely monitoring technical and on-chain metrics for signs of a potential reversal. The BTC/GOLD ratio has reached historically low levels, suggesting Bitcoin is undervalued relative to gold.

Analysts like van de Poppe argue that such divergences have historically led to capital rotations, with Bitcoin often bouncing back as liquidity improves.

On-chain data supports this view, showing a decline in long-term holder selling and an increase in liquidity across major exchanges. The BTC/USDT pair has also seen a bullish crossover in the MACD indicator, signaling a potential recovery if the price breaks above $94,000. A failure to do so could extend the bearish trend.

Meanwhile, institutional ETF flows provide another lens into the market's direction. While Bitcoin ETFs have seen outflows in recent weeks, the cumulative inflows still stand at $57.26 billion. This suggests that institutional investors have not entirely abandoned the asset, despite its price weakness. Gold ETFs, in contrast, have seen consistent inflows, with net assets rising to $18.20 billion.

Risks to the Outlook

Despite these signals, the road ahead for Bitcoin remains uncertain. Regulatory pressures, macroeconomic volatility, and geopolitical risks could all weigh on sentiment. For example, the Bank of Japan's meeting on December 19 is seen as a potential catalyst for liquidity shifts in 2026. A dovish outcome could reinforce gold's dominance while weighing on Bitcoin's appeal.

Another risk lies in the evolving crypto market structure. With ETF inflows narrowing price spreads and reducing volatility, traditional hedge fund strategies have struggled to adapt. This has led to losses for funds that relied on directional trading and liquidity arbitrage. As the market becomes more institutionalized, Bitcoin's price action may become less predictable.

For now, the debate continues over whether Bitcoin can reclaim its role as a digital safe haven. While gold's dominance in 2025 is clear, analysts remain cautiously optimistic that Bitcoin's technical and on-chain fundamentals could support a rebound. Investors are advised to stay tuned for key resistance levels and macroeconomic signals as the market enters a critical phase in late 2025.