Gold vs. Bitcoin: Will XAUUSD Breakout Above $3,500 Trigger Next BTC Rally?

Bitcoin (BTC) and gold (XAUUSD) continue to compete as leading alternative assets for investors seeking stability and long-term growth. Gold has surged above $3,500 to new record highs, supported by strong safe-haven demand. On the other hand, Bitcoin has consolidated above key support levels around $105,000. Both assets are showing renewed strength, but the balance between them is shifting as institutional interest in crypto accelerates.

US Bancorp’s decision to restart its bitcoin custody services after a three-year pause highlights this trend. The move gives institutional investors and bitcoin ETFs access to secure custody through a major US bank, further legitimizing digital assets. Growing participation from traditional finance is likely to add liquidity, attract new inflows, and build long-term support for Bitcoin prices.

This article examines the Bitcoin-to-Gold ratio, technical breakouts, and key price levels to understand the next move in both assets.

Bitcoin-to-Gold Ratio Signals Bullish Breakout Setup

The long-term outlook for the BTC-to-gold ratio remains strongly bullish, as shown on the logarithmic chart below. Historically, the ratio tends to form bullish patterns ahead of major surges. A clear example occurred in November 2012, April 2017, and November 2020, when the ratio broke above a key resistance line, triggering a strong rally in BTC prices followed by gains in the gold market.

Currently, the ratio is again approaching this resistance line, and price action in this region will likely determine the next major move. The recent decline in the ratio from the resistance is due to gold breaking above the $3,500 record level, while BTC continues to correct lower. This divergence has led to a short-term drop in the ratio. However, the broader trend remains bullish, suggesting a strong BTC rally.

A similar pattern appears on the monthly chart below, showing the formation of an ascending triangle. This triangle formation indicates bullish price action. A breakout above the 41 level is likely to trigger a strong upward surge. Last week’s correction occurred within the apex of the triangle. This correction indicates that a decisive breakout above this formation could lead to a significant rally in Bitcoin.

Bitcoin-to-Gold Ratio Consolidates Before Major Move

The same phenomenon is also observed on the weekly chart of the ratio, which shows an ascending triangle formation. The ratio is consolidating between the 20 and 41 levels within this pattern. This consolidation does not change the bullish outlook of the ratio and suggests a potential breakout ahead.

The chart below presents the long-term dynamics of the Bitcoin-to-Gold ratio. It is found that the ratio has been trading within an ascending channel. Notably, a breakout above the 41 level would likely trigger a strong surge toward higher levels. This suggests that Bitcoin prices could multiply significantly if the breakout occurs, indicating that Bitcoin may outperform gold over the next few years.

Bitcoin Holds Key Support Zone After Pullback

BTC Faces Temporary Resistance Near Record Highs

Bitcoin prices corrected lower toward the $110,000 to $105,000 support zone. This drop followed a bearish hammer near the record high of $124,500. However, the current price action shows signs of support at this level. Bitcoin is now initiating a strong rebound toward higher levels. As long as Bitcoin remains above the $100,000 region, the price is likely to continue trading higher.

Technical Rebound Suggests Upside Continuation for BTC

The daily chart for Bitcoin shows strong support. Specifically, the price is rebounding from the key support zone around $105,000. Notably, the red trendline highlights this area. If Bitcoin breaks above its recent record high, the next target will be $140,000. This price projection comes from the ascending broadening wedge pattern.

Gold Breaks $3,500 with Bullish Momentum Building

The recent drop in the Bitcoin-to-Gold ratio was primarily due to the breakout in the gold market above the $3,500 region. As a result, this breakout has opened the door for a potential move toward the $3,750 area, as shown in the chart below. Furthermore, gold prices remain within the ascending channel and appear poised for a strong surge in the near term.