Bitcoin Dives as Gold Sighs: A Wildean Riddle

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Is Bitcoin, that restless dandy of the markets, slipping toward the echo of its 2021 triumph, while gold-oh gold-descends with the grace of a contralto forgetting its lines? Perhaps this is but a grand corrective waltz, swiftly arranging the stage for a future rise in both assets.

Gold bounces after falling like a stone

The most extraordinary corrective impulse for gold in the modern era has the audacity to look modestly ordinary. From a $5,600 peak, it has fallen in a mere three days to $4,400-a 21% cascade, as merciless as a critic’s pen.

While a formidable bounce now puffs its cheeks and preens, one cannot help asking how the gold price could plummet to such depths in such a brief act. Yet the chart-bless its geometric soul-shows the $4,400 horizontal support holding, and an ascending trendline lending a mannered support. The gold price could continue its ascent, given the present geopolitical theater, and a return to the highs may not require a decade of penance.

And what of Bitcoin?

Could Bitcoin be about to take over from gold?

Though not tethered tightly to gold, the consensus among analysts has it that BTC generally follows gold-though with a lag of three to six months. Thus far that lag amounts to about six weeks, so we may be half-way through gold’s outperformance relative to Bitcoin. A ratio chart BTC:gld, however, might suggest that this charming asymmetry could be drawing to a close.

In the near term, the BTC chart shows a rally that could signal a change in the wind, even if the price remains not far from the horizontal support line that runs across to the top of the eight-month bull flag that dominated much of 2024.

Potential Wyckoff distribution reaches the ‘spring’ stage

Let us credit Marty Party, the X-wizard of charted fame, who insists BTC’s recent action mirrors a Wyckoff distribution. If his thesis holds water, the fabled ‘Spring’ has been tripped, and Bitcoin should mount a fresh rally. Whether the drama plays out remains to be seen.

Positives in the daily chart

The daily time frame affords some pleasures, provided one is willing to overlook the bear-flag break. BTC appears to be rising from a sturdy $73,600 support; the Stochastic RSI seems poised to move upward, and the RSI hints at a hidden bullish divergence, an oversold condition that rarely chooses to retire early.

Bear market, or heavy correction?

The double bottom discussed in earlier scrolls may have been eclipsed, yet a more majestic double bottom has marched onto the stage-the price bottom of the descending wedge from April 2025. Moreover, formidable horizontal supports at $73,600 and down to $69,000 stand as sentinels, threatening to resist further declines. The weekly Stochastic RSI has flirted with doom; its crossing down was long predicted as a bear signal. Yet these oscillators plunge swiftly and may leap back upward as soon as next week. Is this the bear’s reign, or merely a heavy correction still seeking its bottom?

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2026-02-02 15:48