Another chart we’ve been monitoring closely is the $XAU / $BTC parity, which essentially reflects the capital flow between gold and Bitcoin. As you can see, the long-term trend has been bearish for several years, consistently printing lower lows and lower highs on the macro view without any significant break of structure. This indicates that the pressure of selling gold and buying Bitcoin is still very much present.
That said, I believe this trend won’t last indefinitely. Perhaps in a few more years, the dynamics could flip. This setup resembles a natural “short squeeze” once the market recognizes that gold is undervalued, buyers are likely to step in, reallocating capital from Bitcoin into gold. Such a shift could drive the XAU/BTC index back toward the 0.1 level. Whether that happens in 1, 3, or even 5 years is uncertain but eventually, market conditions may turn bearish for Bitcoin and bullish for gold.
Returning to the present analysis, we’re not there yet. The selling pressure on gold remains, especially since the index rejected the 12-month resistance level in April. Since then, it has retraced back to the support level, which has now been tested four times, signaling that we are still moving within a choppy range until that support breaks decisively.
In terms of targets, they remain consistent with previous cycles: anywhere between the 1.272 and 1.618 Fibonacci extensions is likely to mark the top of this crypto market cycle.