Chart Advisor: Gold vs. Bitcoin as Opposing Market Proxies

From SIA Charts

Gold vs. Bitcoin as Opposing Market Proxies

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Gold vs. Bitcoin as Opposing Market Proxies

In the ever-evolving world of investment, gold and Bitcoin represent two distinct yet influential assets, often serving as proxies for opposing market sentiments. Gold has long been regarded as a safe-haven asset, sought after by investors in times of economic uncertainty and market instability. Bitcoin, in contrast, has emerged as a high-risk, high-reward digital asset, often used as a proxy for risk in modern financial markets. While gold’s stable performance during volatile periods underscores its role as a store of value, Bitcoin’s more erratic fluctuations reflect investor appetite for risk and speculative growth. The year-to-date (YTD) performance of these assets illustrates this contrast clearly. Gold futures (GC.F) have risen by 19.89%, signaling its enduring status as a safe-haven investment amid global economic shifts. In contrast, Bitcoin futures (BTC.F) have dropped by 7.17%, reflecting its sensitivity to broader market risk factors and investor sentiment. This divergence highlights the differing roles these assets play within investment portfolios—gold offering stability and Bitcoin providing exposure to higher volatility and potential returns. As we move forward, this report will focus on the performance of each asset class to uncover what these movements tell us about the latest market rout. First, we will examine gold’s resilience, noting that it is currently encountering resistance levels despite its role as a safe-haven asset. Then, we will turn our focus to Bitcoin, where we may be seeing signs of support emerging after its recent pullback. By analyzing these trends, we aim to understand how both assets are navigating the current market challenges and what their respective movements might tell us about the future direction of the overall market and investor risk appetite.

Bitcoin’s Price Struggles and Current Support Levels

Courtesy of SIA Charts

Starting with the SIA Bitcoin Continuous Contract, where the price of this risk proxy topped near $110,000, along with many other risk assets like the NASDAQ Composite Index and the riskier sectors such as Electronics & Semiconductor stocks. Like their equity counterparts, the price of Bitcoin corrected in the early months of 2025. With prices falling, there was an attempt to hold support at $90,400, but it failed with a triple bottom breakdown on the point and figure chart. Attempts to rally upwards failed several times over the months of March and now early April. In doing so, Bitcoin appears to be in a battle of price discovery, which is highlighted by the black lines—a triangle that, when completed either to the upside or downside, could potentially become a bullish or bearish triangle, but this remains to be seen. In the meantime, Bitcoin might still face resistance at $90,400 on the 2% scaled point and figure chart, while support appears to be forming at the $78,698 level. Beyond this, we have highlighted a longer-term level between $72,705-$75,642 that might represent a more solid level of support, given that this level has built up over the period from 2021-2024. Ultimate resistance now remains near the all-time high at $108,036, and any move beyond $110,197 would necessitate a re-valuation of new upside resistance, which we could count from the recent consolidation range. However, it could understandably be markedly higher given the breakout that occurred late last year.

Gold’s Resilience and Resistance Levels in the Current Market

Courtesy of SIA Charts

The move on gold, as seen in the attached SIA Gold Continuous Contract, was rather textbook. The move was built upon the spread quadruple top formation at $2,107, where a 21-box consolidation level was broken, paving the way for a material move. Counting 21 boxes higher, we find the new level of resistance at $3194, in and around current levels. In a classic “buy on the rumor and sell on the fact” type of scenario, this safe-haven asset may have predicted and provided safe harbor for the highly anticipated “liberation day,” when America is about to be Great Again. Given that the overall market got smoked today, with the NASDAQ down almost 1000 points and shaved off 5.5% in one day, the big question is: what does this safe haven tell us about the risk appetite of the overall markets? At the same time, gold is in fact finding at least a little resistance today, with bullion trading down $14—albeit a drop in the bucket compared to the declines in the overall market. But gold isn’t up, so that in itself is a tad interesting. So, has gold now served its purpose and completed its round safe-haven trip, or is it just getting going to the upside while the overall market is readying for its next leg down? Our suspicion is that the resistance is real, but it will take days, and perhaps weeks, to confirm this. In the meantime, it might be wise to cool the jets and see what these intermarket relationships between Bitcoin (risk) and gold (safety) can speak to us in our technical, unemotional ear. In the meantime, we will watch for resistance at $3,194 and any move beyond it, as well as any 3-box reversal where supply takes command of gold bullion trading, with support at $2,780 potentially becoming the new level to watch. Stay tuned.

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Originally posted 4 April 2025