Gold vs. Bitcoin: Why Gold Leads in 2025 While Bitcoin Prepares for a Breakout

Gold (XAUUSD) has outperformed Bitcoin (BTC) in 2025. The chart below shows that the gold price has increased by over 40% compared to Bitcoin’s 20%. The central bank rate cuts, rising inflation expectations, growing deficits, and global instability drive demand for gold.

Meanwhile, the Bitcoin price is not collapsing, but it trades more like a risk asset. Despite strong volatility in Bitcoin over the past few years, the prices remain elevated and construct a bullish structure.

Bitcoin and gold both attract investors seeking safe-haven assets. Many early bitcoin adopters came from the gold community, drawn by the promise of digital currencies.

Bitcoin’s creator, Satoshi Nakamoto, even linked the currency’s symbolism to the history of gold. However, markets treat these assets differently: bitcoin trades like a high-growth tech stock, while gold remains the classic hedge during crises.

Gold vs. Bitcoin: Diverging Cycles and the Breakout Signal in the Ratio

Historical data shows that Bitcoin’s price has been explosive since 2009, surging above $100,000 in different cycles. On the other hand, gold’s price has doubled since its 2012 peak and broke higher in 2024.

This pattern indicates that bitcoin performs best in risk-on environments, while gold thrives when fear dominates the market. This contrast is key to their performance gap this year.

The Bitcoin-to-gold ratio shows the formation of an inverted head-and-shoulders pattern below the neckline at the 35 level. The recent correction in September reached a strong support zone, from which prices are now rebounding.

A decisive break above 40 on the ratio would signal a strong upside move in Bitcoin. Such a breakout could potentially drive Bitcoin prices toward much higher levels, targeting the $250,000 area.

Gold’s Institutional Edge vs. Bitcoin’s Seasonal Strength

Central banks are purchasing gold at record levels, even crossing the U.S. Treasury securities in some cases. For institutions, gold remains a more liquid and better-regulated asset, making it the preferred choice for a safe haven.

However, Bitcoin still faces uncertainty in many regions, slowing institutional adoption. According to the surveys, gold ownership far outpaces bitcoin ownership globally, reinforcing its dominance as a safe-haven asset.

The chart below shows the historical seasonality of Bitcoin for the past 10 years, tracking the percentage of months in which Bitcoin closed higher than it opened. It is observed that February, July, October, and November stand out as the strongest months, with probabilities of gains as high as 82%, 73%, 90%, and 60% respectively.

However, August and September are historically weak months, with only 27% and 45% of positive closes and negative average returns. This seasonal pattern suggests that Bitcoin’s recent correction toward the $105,000 support zone may represent a buying opportunity, particularly as October and November historically favour stronger rallies.

Bitcoin Technical Analysis: Bullish Patterns Point to New Highs

The weekly chart for Bitcoin shows a strong bullish formation, characterized by an inverted head-and-shoulders pattern and a neckline located near the $105,000 area. Bitcoin reached a record high of $124,000 before correcting back to the $105,000 level. Following this correction, prices are now surging higher, suggesting that new record highs are likely ahead.

This strong bullish price structure is also visible on the daily chart, which shows an inverted head-and-shoulders pattern followed by a broadening wedge. Within this wedge, a strong Adam and Eve pattern has formed around the $105,000 region.

The price has now surged above $115,000, signalling a strong move toward the $140,000 level, which represents the key resistance of the symmetrical broadening wedge pattern.

Gold Technical Analysis: Strong Bullish Momentum

The weekly chart for spot gold shows that after breaking above the $3,500 area, the price initiated a strong surge toward the $4,000 region. This level serves as the initial target, and price action around $4,000 will likely provide clues for gold’s next move.

Despite the sharp rally, gold remains at extremely overbought levels, as indicated by the RSI. However, the overbought market condition has persisted since the rally began in 2024. Any correction in the spot gold market would likely present a strong buying opportunity for long-term investors looking for the next surge higher.