The Iran crisis is in full swing, with bombs falling on both sides, oil prices spiking, and uncertainty at an all-time high. In this environment, gold ripped to 5400 before correcting to 51, while Bitcoin has started to move and is trading at 73,950, right about to get above 74.
This raises several questions: is Bitcoin showing an early sign of a full reversal or a new bull market, and is it acting as digital gold or still mostly as a high beta risk asset that rebounds quickly? The discussion centers on Bitcoin’s price structure, its relationship with gold, and how to think about both assets during a period of global uncertainty.
The Current Bitcoin Bounce
Bitcoin is reaching nearly 74,000 right now. However, this move alone is not enough to declare a new bull market. The key levels being watched are the 200 week SMA and the 50 week SMA.
The framework presented here is simple: the Bitcoin bull market does not depend on its performance versus gold. While Bitcoin has followed gold since 2023 and the two moved together over the past two and a half years, that relationship did not matter for all the cycles before that. If the goal is to determine whether Bitcoin is in a bull or bear market, the main reference remains Bitcoin’s price against the dollar.
Key Levels to Watch
- Bitcoin’s dollar value is around 73,000.
- The 50 week SMA is at 98,000.
- The previous swing high is around 94.5K to 95K.
For confirmation of a new uptrend, both of these levels need to be taken out:
- The 50 week SMA
- The 95K swing high
The next time Bitcoin breaks above the 50 week SMA, it should also make a higher high. The preferred trend method here is to watch for higher highs and higher lows. Since Bitcoin previously made a new low, a full breakout above the previous high is needed to confirm a new uptrend.
Until then, this is not a confirmed bull market. So far, it is just a bounce, and a very small bounce even.
Why Caution Still Matters
The bounce is described as nice relief, but not a reason to get ahead of yourself. The view here is that this remains a bear market, and the most likely scenario for Bitcoin right now is more chop.
The suggested approach is to keep buying slowly through DCA rather than going all in. That applies whether Bitcoin was in the low 60Ks or closer to current levels. Missing buys in the low 60Ks does not mean the opportunity is gone, and there is no need to FOMO into the current move.
Why Patience Is Emphasized
- The chance that this move is the absolute bottom is described as quite low.
- This market still has uncertainty.
- The most likely scenario is continued choppy price action.
- This is still considered a bear market, not a confirmed new bull market.
The Iran Crisis and Oil as a Market Risk
There is still uncertainty related to the Iran crisis. The main chart to watch is Brent crude oil, which is still rallying and is at 82.5.
According to this framework, 80 does not appear strong enough as resistance to stop the move. Each day that oil prices remain high adds more risk to the market. A quick resolution is needed, because if the situation drags on, oil prices are expected to trend higher.
If oil breaks above the 90 to 95 resistance area, it is described as looking pretty bad. That is one of the major headwinds that could push Bitcoin in the other direction.
Bitcoin Versus Gold
The second half of the framework focuses on Bitcoin versus gold. One positive point in the current Bitcoin bounce is what is called a catch-up trade against gold.
Bitcoin versus gold bottomed around 12.4 last week, and with the current Bitcoin rally the ratio is now at 14. This raises the question of whether Bitcoin is digital gold again.
Two Historical Phases
The ratio of Bitcoin price divided by gold price since 2010 can be viewed in two phases.
- Pre-digital gold era: before 2023
- Digital gold era: from January 2023 onward
Before 2023, the Bitcoin-versus-gold chart basically looked the same as Bitcoin’s USD chart. The reason given is that Bitcoin was still very cheap and extremely volatile, while gold did not move much. During that period, Bitcoin’s own volatility and cycle structure dominated the chart.
Since 2022, however, the digital gold valuation metric started to make sense. Two things changed:
- Bitcoin and gold became heavily correlated.
- Bitcoin became large enough to be considered in the same league.
The view here is that Bitcoin and gold only truly started trading as part of the same basket from January 2023. That basket includes anti-debasement, anti-global crisis, de-dollarization, anti-inflation, and safe haven themes.
The Correlation Since 2023
From late 2022 or early 2023 until October 2025, Bitcoin and gold were described as moving up together with heavy correlation. A one-year running correlation coefficient is referenced to show that there had never been an extended period of high correlation between the two before December 2022 or January 2023.
This is why the framework argues that when talking about Bitcoin as digital gold or a safe haven, only the last three years should really be analyzed. Looking too far back mostly just captures Bitcoin’s own market cycles, because gold contributed very little to those earlier moves.
Why Bitcoin Decoupled From Gold
Since October of last year, Bitcoin and gold have decoupled. The view presented is that something broke after October 10th, after the market crash in crypto, and that there has been indiscriminate selling. No further speculation is offered because there is said to be no news confirming the cause.
From January 2023 until August 2025, Bitcoin outperformed gold. From August 2025 until today, gold has outperformed Bitcoin.
Using the Bitcoin-Gold Ratio as a Valuation Metric
The practical use of the Bitcoin-versus-gold relationship is to treat it as a valuation signal. In both price ratio and market cap ratio terms, the idea is to assess whether Bitcoin is oversold or undervalued compared to gold, assuming both assets still belong in the same category.
Bitcoin is said to be 43% below the 200 week SMA on the Bitcoin-versus-gold ratio. This is described as a very large deviation.
If one believes Bitcoin should eventually mean revert against gold, then this is described as a better time than ever to be buying Bitcoin for the catch-up trade with gold.
Important Ratio Levels Mentioned
- Bitcoin versus gold bottomed around 12.4 last week.
- It has rebounded to 14.
- The ratio reached 35 in 2021.
- It reached 40 in this cycle.
At a ratio of 40, one Bitcoin was worth 40 ounces of gold.
Why New All-Time Highs Against Gold Are Considered Unlikely
This framework argues that Bitcoin is unlikely to make new all-time highs against gold in ratio terms. The reasoning is based on the current level of gold and assumptions about both assets over time.
Gold is at 5,100 today and reached 5,400 earlier in the week. If Bitcoin had not underperformed against gold, it would already be above 200K. That is described as not cheap.
The argument then extends forward: even if Bitcoin reaches 1 million dollars over the next 10 years, that would likely happen in a world of heavy inflation, weaker dollar strength, heavy money printing, global unrest, and other conditions that would also drive gold higher.
Under that logic, gold reaching something like 25,000 is described as a fair assumption. If Bitcoin reached 1 million and gold reached 25K, Bitcoin still would probably not make a new all-time high against gold in ratio terms.
As a result, the Bitcoin-versus-gold chart is seen less as a long-term breakout chart and more as an oscillator.
The Digital Gold Oscillator
The core idea is that from 2023 onward, Bitcoin versus gold should be treated as a range rather than a permanent uptrend. In this framework, the market cap ratio of Bitcoin to gold forms a valuation band.
The Range
- Low end: about 2.4%
- High end: about 11% to 11.5%
This range is called the digital gold ratio. When Bitcoin is near the low end of the range, it is considered undervalued relative to gold. When it is near the high end, it is considered expensive relative to gold.
At present, Bitcoin’s market cap is about 4% of gold’s market cap. At its peak in December 2024, Bitcoin’s market cap reached just over 11% of gold’s market cap.
The conclusion is straightforward:
- Buy Bitcoin when it is cheap relative to gold in the lower part of the range.
- Sell Bitcoin and convert to gold when Bitcoin becomes expensive relative to gold in the upper part of the range.
This is framed as a rotation trade rather than a belief that Bitcoin will replace gold.
Bitcoin and Gold as the Same Category, Not Replacements
The framework says it is no longer healthy or productive to think about Bitcoin as something that replaces gold. Instead, Bitcoin and gold should be thought of side by side as two assets in the same category.
They are in the same basket, but they will not perform exactly the same. Sometimes Bitcoin will outperform gold, and sometimes gold will outperform Bitcoin. It is a rotation.
The conclusion is that Bitcoin is not going to replace gold, and even the most bullish Bitcoin supporters are said not to truly believe that.
Ray Dalio and Allocation Signals
Ray Dalio is used as an example of how public comments and portfolio recommendations may differ. He warned against people buying Bitcoin, saying Bitcoin needs privacy and that central banks have a hard time adding it to their balance sheets because of that. He also said that if you are looking for an asset to buy, there is only one gold.
At the same time, he still holds about 1% of his portfolio in Bitcoin and had previously recommended a combination of 15% allocation to Bitcoin or gold. This implies roughly a 1-to-15 ratio of Bitcoin versus gold, or 6.66%.
That 6.66% sits roughly in the middle of the current digital gold valuation range. This is presented as his fair allocation level.
What This Suggests
- When Bitcoin trades well below that level relative to gold, it can be seen as cheap.
- When it trades above that level, it can be seen as expensive.
- The framework suggests rebalancing between Bitcoin and gold based on where the ratio sits.
It is also noted that if Bitcoin were already trading at 115K right now, Ray Dalio would still hold that Bitcoin compared to gold. This is used to argue that Bitcoin is currently cheap relative to gold.
Practical Takeaway
The current conclusion is that Bitcoin is cheap compared to gold right now, especially within the lower 25 percentile of the digital gold valuation range. That supports the idea of buying Bitcoin for a catch-up trade versus gold.
At the same time, none of this changes the earlier caution on Bitcoin’s USD chart. The current move is still only a bounce, not a confirmed bull market. The key technical confirmations remain a move above the 50 week SMA and a breakout above the 95K swing high.
So the two main conclusions are held together:
- Against the dollar, Bitcoin has not yet confirmed a new uptrend.
- Against gold, Bitcoin looks cheap and may offer catch-up upside.
FAQ
Is Bitcoin in a new bull market?
No. The current move is described as a bounce, not a confirmed bull market. Confirmation would require Bitcoin to break above the 50 week SMA and the 95K swing high.
What are the key Bitcoin price levels to watch?
The main levels are the 50 week SMA at 98,000 and the previous swing high around 94.5K to 95K.
Why is oil important right now?
Brent crude oil is still rallying and is at 82.5. If oil continues higher, especially above the 90 to 95 resistance area, it is seen as a growing market risk.
Is Bitcoin acting as digital gold?
The framework says Bitcoin and gold have been in the same category since January 2023, sharing anti-debasement, anti-global crisis, de-dollarization, anti-inflation, and safe haven themes.
Should Bitcoin replace gold in a portfolio?
No. The view here is that Bitcoin should not be thought of as replacing gold. Instead, both should be viewed side by side as assets in the same category.
How should the Bitcoin-versus-gold ratio be used?
It should be treated as a valuation and rotation metric. Buy Bitcoin when it is cheap relative to gold in the lower part of the range, and rotate into gold when Bitcoin becomes expensive relative to gold in the higher part of the range.
What is the digital gold ratio range?
The range described here is about 2.4% to 11% or 11.5% for Bitcoin’s market cap relative to gold’s market cap.
Where is Bitcoin relative to gold right now?
Bitcoin’s market cap is about 4% of gold’s market cap right now, which is considered a very low valuation compared to gold.
Reference Video
John Burnell focuses on Bitcoin infrastructure, wallet security and blockchain technology. He writes educational articles explaining how Bitcoin works and how the technology evolves.
