Bitcoin and Gold in Sync—Will BTC Follow Gold’s Record-Breaking Rally?

• The price of gold has jumped to a new ATH as adoption grows.
• With deep correlation in past market cycles, BTC may also be ready for a Gold-induced rally.

Gold, often touted as the queen of precious metals, is booming, driven by strong demand. Despite the ongoing economic uncertainties, Gold hit a new All-Time High (ATH) during today’s morning trading session. 

Meanwhile, Bitcoin (BTC) has often shown a strong correlation with Gold in previous market cycles. As a result, investors are now wondering whether BTC will set new highs, following in Gold’s footsteps.

Analysing Gold and Bitcoin’s Current Movement

Gold began the week with a huge spike amid mounting trade tensions and economic uncertainty. The asset met its 2.2% gains from the previous week in just two days. Gold rose to as high as $2,942 per ounce before dropping to the current price of  $2,907. 

On the contrary, Bitcoin is currently in a consolidation phase after dropping from its ATH attained on Inauguration Day. Since then, Bitcoin, popularly called digital gold, has traded between $91,000 and $105,000.

Note that Bitcoin and Gold have shown a strong correlation over the years. However, the price of Bitcoin tends to grow at a larger scale than Gold. Previously, we explored that Gold rose 2.08% within a week to hit an ATH of $2,700. Following this uptrend, Bitcoin’s price increased by 11% within the same time frame.

Recently, Analyst Daink highlighted an ongoing decoupling between Bitcoin and Gold. While the former has entered an accumulation phase, the latter has surged to unprecedented highs. However, the analyst suggested that Bitcoin may soon reverse this latest decoupling, citing historical trends.

Image Source: Trader Daink on X

Analyst Daink posted a chart that showed Bitcoin catching up with Gold’s surging prices. The chart highlights two scenarios in which Bitcoin has returned to a Gold correlation. Daink emphasized that whenever gold surges higher and pushes Bitcoin away, the cryptocurrency always plays catch-up with its movement.

For instance, Gold broke out against Bitcoin to new highs during the 2022 crypto bear market. At the time, Bitcoin continued to consolidate at its lows following the FTX implosion. However, Bitcoin rose again in 2023, catching up with Gold’s trend.

Considering past events, Daink speculates that Bitcoin would soon match Gold’s recent price outperformance. He did not, however, specify a timeline for the recoupling.

Can Bitcoin Hit New ATHs?

The historical correlation cited above suggests that Bitcoin may soon target new all-time highs. Aligning with Daink’s sentiments, market enthusiast Carbon speculated that Bitcoin would follow through with Gold.

“Historically, Gold rips through ATH. Bitcoin follows a few months later,” says Carbon in an X post.

While the analysis from Daink and Carbon did not predict Bitcoin’s target if it follows gold, earlier commentary suggests Bitcoin’s target before the end of 2025.  As noted in our earlier post, Lark Davis predicted that Bitcoin could hit $300,000 by year-end, driven by adoption.

JAN3 CEO Samson Mow also predicted that BTC could hit $1 million by 2025, as reviewed in our recent publication.