Bitcoin’s three-month uptrend against gold appears to have ended, as ETF flows shift toward gold and other precious metals.
This is evident from the bitcoin/gold ratio, which measures the dollar price per coin of BTC compared to the dollar price per ounce of gold. This is the chart that tells you which “store of value” investors actually prefer at any given time.
Since the beginning of March, bitcoin has been the clear winner, increasing the ratio from around 12 points to 18 points.
But not anymore.
Growth has been stagnant of late, and in the last 24 hours it has declined significantly, ending the three-month uptrend.
The ratio penetrated the uptrend line, characterizing BTC’s mini bull run against gold. In the world of technical analysis, this is a major breakout, signaling a further shift in dynamics in favor of gold.
Why it matters
The signal is not just about the chart lines, but tells us where the smart money might be heading next.
When the war in Iran began in late February and oil prices soared to more than $100 a barrel, investors looked for a place to park their cash. And for a while, they relied on bitcoin as a safe haven, as evidenced by the rise in the BTC-gold ratio.
But this same ratio now invalidates its upward trend, indicating a new rotation of investors towards gold.
Note that chart patterns such as trendline breaks can and often are fleeting, but for now the message is clear: gold could outperform BTC in the near term.
Market flows support this interpretation.
Precious metals ETFs are in demand
Bitcoin-linked exchange-traded funds have fallen out of favor with investors, losing more than $2 billion in two weeks amid hardening Treasury yields and the prospect of higher and longer interest rates in the United States.
Meanwhile, gold and precious metals funds are in high demand. These funds attracted $2.34 billion of investor money in the week ended May 20, extending their inflow streak for a second straight week, Reuters reported, citing LSEG Lipper data.
At the time of writing, bitcoin changed hands near $75,600, down 0.3% from midnight UTC, and gold traded largely steady around $4,500.
