Gold Enters Overbought Correction Versus Bitcoin: Can BTC Rally Now?

Gold’s (XAU) strong 2025 run appears to be cooling, and Bitcoin (BTC) might be the one benefiting next.

Bitcoin Set to Recover Against Gold: Fractal

Historically, Bitcoin tends to outperform when the gold-to-BTC ratio’s (XAU/BTC) relative strength index (RSI) crosses above 70, signaling that gold has become overbought relative to Bitcoin.

Each time this ratio overheated—in late 2022 and mid-2024—gold’s momentum faded sharply while Bitcoin entered powerful recovery phases.

In late 2022, XAU/BTC’s RSI spiked above 70, preceded by a 41% decline in the ratio, while Bitcoin rallied nearly 90% from $15,000 to $28,000. A similar setup emerged in early 2024 when the RSI again hit the overbought zone, followed by a 26% gold-to-BTC drop and a 38% rise in BTC.

Now, the XAU/BTC RSI is once again retreating from overbought levels. This suggests traders are rotating out of gold after its strong 2025 rally, historically a bullish environment for Bitcoin.

Spot gold has declined by 7.20% since establishing its record high at around $4,380 on Monday, erasing valuations comparable to Bitcoin’s net market capitalization.

Overheated correction seems to be the case in the gold market, wherein lofty valuations are pushing investors to lock in profits. The metal is still holding above a key support at the 20-day exponential moving average (20-day EMA; the green wave) near $4,044.

On the other hand, Bitcoin is gaining but feels extreme resistance inside the $110,000-114,000 area.

A major reason behind a cautious bullish sentiment is one mysterious whale, who made $200 million in profits by shorting Bitcoin during the Oct. 9 crash.

The entity opened his position just 15 minutes before Donald Trump’s China tariff threat, which has raised suspicion that s/he might be a “Trump insider.”

As of Thursday, this whale had closed all his positions after netting $12 million in profits, according to Lookonchain.

Smart trader 0xc2a3, with a 100% win rate, just closed his $BTC short — locking in another $826K profit!

He has made a total profit of over $12M in the past 11 days with a 100% win rate.https://t.co/Xw2NAOJX55 pic.twitter.com/L3mLxSxoxg

— Lookonchain (@lookonchain) October 23, 2025

Standard Chartered Predicts Bitcoin Below $100K, But…

Standard Chartered’s Geoff Kendrick expects Bitcoin to briefly dip below $100,000 before rebounding toward his $200,000 year-end target.

He attributes the potential pullback to temporary risk-off sentiment and capital rotation into gold, which has regained strength amid geopolitical jitters.

Analysts at Standard Chartered expect $BTC to fall below $100k, but then pump again.

On the chart, their analysis looks like holding the price above the 50 WMA, which is currently at $102k 👀#BTC #Crypto #Bitcoin pic.twitter.com/uugIGjHEpj

— TheCryptologist (@SergaNikolaj) October 23, 2025

However, Kendrick also believes the move could be Bitcoin’s final sub-$100K opportunity, as gold’s outperformance historically fades once markets stabilize.

The view complements the ongoing RSI reversal in the gold-to-BTC ratio, reinforcing the idea that while gold cools from overbought levels, Bitcoin may soon reclaim leadership in the risk-asset cycle.