Gold prices climbed to new all-time highs in mid-October, breaking above $4,000/oz for the first time in history before eventually reaching a peak of $4,342/oz. The yellow metal’s rally came at a time when BTC was too suffer a flash crash causing the price to drop very briefly to $101,000.
This contrast between gold’s surge and BTC’s pause has caught the attention of crypto commentator Sykodelic, who believes the pattern is about to reverse. In his latest analysis, he suggests that gold may have already peaked, while Bitcoin prepares for its next big rally.
Gold’s blow-off top and cycle inversion
Sykodelic pointed out the nearly 18-month inverse correlation between gold and Bitcoin as the basis of his argument. The analyst’s chart, which overlays both assets, shows a pattern of alternating expansions and corrections. Every time gold rose, BTC entered a cooldown, and every time gold stabilized or corrected, Bitcoin followed with a big upward move.
The most recent series puts gold in what looks a blow-off top structure. This top structure is a parabolic rally followed by exhaustion, confirmed by the precious metal’s current correction below its all-time high.
This phase is always correlated with the moment of transfer between the two assets. During periods when retail enthusiasm reached a golden peak, Bitcoin’s price quietly consolidated on support zones. This timing, according to Sykodelic, is “almost to the day.”
The comparison chart below shows the synchronization. Gold’s breakout phases, shown in green channels, are followed by cool-down phases highlighted in red, and Bitcoin’s chart below follows the same rhythm with a slight lag. The structure implies that Bitcoin’s recent consolidation around $110,000 to $115,000 could reflect the early stages of gold’s final expansion phase in early September.
What does this mean for Bitcoin?
From a technical perspective, this setup means that Bitcoin is now entering the same pattern that gold just completed. with momentum building the lower boundary of the new green channel, marked in the map image above. This implies that a breakout could push Bitcoin far above its current all-time high, creating a new cryptocurrency rally similar to the movement of gold earlier this month. “It’s Bitcoin’s turn to pump really hard,” Sykodelic said.
The channel projection on his chart shows a progression that will see the BTC price rise above $140,000 by the end of 2026, before the next capital rotation into gold. Of course, this all depends on what the market is like news and events unfold in favor of the crypto market.
At the time of writing, Bitcoin is trading at $114,196, up 6% in the past seven days. Gold, on the other hand, is trading at $3,930, down 9.5% over the same period. This difference could be the first sign that the capital rotation is already underway.
Featured image from Pixabay, chart from Tradingview.com
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