Gold vs Bitcoin: Why the Defensive Trade Is Winning the Battle

Gold (XAU) and Bitcoin (BTC) are different types of assets with different performance profiles. It is noticed that gold has not moved much from 2013 to 2022. However, the price has increased by 175% after 2022. This is considered a very powerful shift. On the other hand, Bitcoin has an impressive record for the past 10 years. However, its price has been lagging gold since 2025. The price of Bitcoin is more than 30% lower than its record highs, which raised some concern about future of Bitcoin among crypto investors.

Gold price is benefiting from global uncertainty. Trade wars, geopolitical tensions and record US debt have all eroded confidence in the US dollar. At the same time, central banks are purchasing gold. In fact, their gold holdings are now worth more than their US Treasury reserves, which indicates shift in global sentiment.

Bitcoin behaves like a risk asset as its price swings are dependent on market optimism or fear. For it to become a true store of value like gold it requires wider acceptance by large institutions. That process takes time, but the digital nature of Bitcoin may help it evolve to become a valuable asset.

Gold Rally Resumes After $4,400 Support Bounce

Despite the strong surge in gold since 2023, the price attempted to produce a blow-off event in January 2026. The biggest historic one day drop in gold occurred on the last business day of January 2026. The key events of this expected drop were mentioned in previous article.

This event was triggered due to the extremely overbought levels and extended rally in gold. The price hit strong support at $4,400 in just 3 days after producing a top at $5,600.

After hitting support, the price strongly rebounded higher above $5,000. The long-tail candles on the daily chart indicate short-term strength in gold, which suggests continuation of further upside. However, a breakout above record levels is required to keep the bullish momentum in gold.

Bitcoin Price Weakens as Support Levels Come Into Focus

Despite the strong rally in gold, Bitcoin continues to drop lower toward support. As discussed previously, the Bitcoin market has formed rounding top pattern around $120,000, which indicates lower prices.

Moreover, the breakdown from $100,000 and failure to stay above this level indicate sustained negative price action in Bitcoin. However, the price is now approaching $75,000, as seen in the chart below.

A break below $75,000 will indicate a further drop toward $55,000 to $60,000, which is a strong long-term support. Investors and traders will likely buy Bitcoin between $60,000 and $70,000. A break above $100,000 in Bitcoin will likely trigger strong rally.

The strong drop in Bitcoin is also observed on the weekly chart, which shows that the price has broken the $100,000 level at ascending trend line. This breakdown indicates continued downside momentum. The price is now approaching $75,000 that may introduce a rebound.

Gold-to-Bitcoin Ratio Breaks Out: What It Signals for Both Assets

Gold to Bitcoin ratio shows a historical breakout from descending channel. This structural breakout at 0.05 indicates that the gold price might remain positive over the next few months. Moreover Bitcoin may underperform the gold rally.

It is observed that despite the strong drop in gold last week, the gold to Bitcoin ratio continues to push higher in February. This further highlights the strength of gold and weakness of Bitcoin.

Conclusion: Gold Holds the Edge as Bitcoin Seeks Support

Gold and Bitcoin are following different paths, with gold showing strength as a defensive asset while Bitcoin is risk driven investment. The strong reversal in gold from $4,400 and strength in the gold to bitcoin ratio indicate continued strength in the gold market. This strength is supported by the global uncertainty, central bank demand and technical strength.

Meanwhile, Bitcoin faces downside risks, but the price is approaching a significant support of $75,000 and $60,000. The Bitcoin price is likely to turn from this support level. Until Bitcoin remains below $100,000, gold will likely maintain relative leadership.

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