If y’all remember the BTC/GOLD chart and the 1W 9/21 crossover framework I’ve been tracking ever since we got that red downside cross, BTC against Gold has dropped -62.42%. The largest drop on record for this signal was -68.53%, and that was during the 2022 bear market. It seems like Scenario 2 from the AF that I wrote last year has played out. Question is, where do we go from here?
TLDR
My base case is that we are very close (if not already at) the bottom for BTC/Gold on this chart, give or take a few percentage points. And critically, BTC “outperforming” Gold from here doesn’t necessarily mean BTC rips. There are multiple paths to outperformance and I think the most likely one is actually the least obvious.
Let’s walk through the data, the scenarios and the setup.
The BTC/Gold ratio has long served as a reliable gauge of macro risk appetite and liquidity cycles. When Bitcoin strengthens relative to Gold, it often reflects improving market sentiment and rising liquidity conditions across crypto risk assets. The inverse holds true on the downside and right now we’re deep in that downside regime.
The 1-week 9/21 EMA cross strategy remains the simplest and most consistent framework for mapping these shifts:
- When the 1W 21 EMA crosses above the 9 EMA, BTC tends to enter a sustained downside phase relative to Gold.
- When the 1W 9 EMA crosses back above the 21 EMA, it signals the start of a sustained upside cycle.
The Data
Across BTC/Gold’s full history, there have been 8 downside crosses. Here’s the complete dataset:
The largest drawdown following a bearish cross reached -68.53%, while the smallest and briefest was the -7.69% “fakeout” in 2023 which was the quick shakeout that I was hoping we’d get again coming into Q4 last
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