The current Bitcoin-to-Gold ratio (BTC/GOLD) is at historical lows, with multiple technical indicators suggesting the market may be approaching a cyclical bottom. To avoid a more significant decline in the near term, Bitcoin's price needs to hold the critical $70,000 level.
From a technical perspective, both the weekly Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) for Bitcoin against Gold are exhibiting classic bullish reversal signals. In mid-February, the weekly RSI touched an extremely oversold level of 21, indicating that bearish momentum is waning. Concurrently, the MACD indicator has fallen to its lowest recorded point and is on the verge of forming a golden cross, signaling a potential upward trend.
Notably, the combination of the RSI's recovery from oversold territory and the impending golden cross on the MACD closely resembles the conditions observed during past cyclical bottoms. The last time Bitcoin bottomed out relative to Gold was in November 2022, after which Bitcoin experienced a surge of up to 700%, reaching a record high of $126,000.
Currently, the RSI has recovered from 21 in mid-February to 33. When this signal is combined with the MACD's buy signal, the overall picture becomes increasingly similar to past cyclical bottom formations.
Analysts point out that this cycle has lasted approximately 13 months, with Bitcoin's price retracement against Gold reaching 81%, surpassing the decline seen during the 2021 bear market.
The short-term price action of Bitcoin is crucial, and the psychological $70,000 mark must be defended. A breach of this support level could trigger a deeper pullback.
