A spectacular $6,000 surge from Bitcoin on Tuesday took the king of the cryptocurrencies to nearly $94,000. While stock markets joined in the rally, gold fell, down 3.9% from its $3,500 top. Is Bitcoin about to take over the reins from gold?
Trump deescalation rallies markets
Bitcoin’s rally took place as President Trump deescalated the tariffs war with China after Treasury Secretary Scott Bessent had stated that the high tariffs were unsustainable. President Trump confirmed Bessent’s view, and said that Chinese tariffs would be substantially reduced.
The President also helped to allay market fears by walking back from his statement of the previous day when he had called the Federal Reserve Chairman a loser. He has since stated that he has no intention of firing Powell, and that he just wished that the chairman was more active as regards interest rates.
These two changes in thinking were enough to spark a sizable relief rally in the U.S. stock market, as the S&P 500 rose 2.51%, and the Nasdaq 2.71%.
Gold pulls back from high at $3,500
Source: TradingView
On the other hand, gold’s incredible run looks as though it may have finally come to a halt when a new all-time high of $3,500 was put in on Tuesday, before a retreat back to $3,300 on Wednesday.
Bitcoin takes over from gold
Source: TradingView
The weekly Bitcoin/gold chart shows the beginning of a potential handing over of the baton from gold to Bitcoin. The downtrend that seriously got going in January, led to a 39% drop to the detriment of Bitcoin, as gold went on a tear.
However, the downtrend looks as though it may have been definitively broken by a tall weekly green candle, which has also bounced from the 25 ounce support.
At the bottom of the chart, the Stochastic RSI indicator lines are just ticking upwards. This could augur a rise to a higher high, and a continuance of Bitcoin’s domination over gold.
Bitcoin surge about to run out of steam?
Source: TradingView
The $BTC price has continued to rise, breaking through $91,300 and turning that into support. The trend break already occurred as the price sailed through $88,600, and it now remains to be seen just how far this current surge will go.
$94,000 through to $95,000 is strong resistance, and it may be here that this current surge runs out of steam. All of the short-term Stochastic RSIs are at the top, and this is the case all the way up to the 3-day time frame. A correction must be on the way soon.
2-week candle close is critical
Source: TradingView
The macro 2-week chart for Bitcoin displays an excellent eagle-eye view of the price action since the beginning of 2024. There are 4 days left in this time period, and so where the current 2-week candle closes could have a lot of relevance on the direction of the next few candles.
Maintaining the height of this current candle will be important for the bulls. A close underneath $91,300 could have the effect of causing more sideways price action, or even a return to lower levels.
That said, the price action over the last six months could even be seen as another bull flag. With the Stochastic RSI looking to have a cross up of the indicator lines, and the RSI crossing up through a downtrend, the scene could be set for an upwards price explosion in the coming weeks that is similar to the one that erupted out of the last bull flag.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.